King, maker and purveyor of Candy Crush, reported earnings today and was whacked by investors after detailing revenue that disappointed, and lowering its top line guidance. The company also announced a $150 million dividend.
The company earned $0.59 per share on a non-GAAP basis on revenue of $594 million. Investors had expected the company to report $0.59 per share in non-GAAP profit on revenue of $608 million, however.
In addition to that revenue miss, King guided that its gross bookings for the current quarter will total between $500 million and $525 million — its gross bookings for the full year will tally up to between $2.25 billion and $2.35 billion. Investors are not pleased.
A venture capitalist familiar with the public technology markets indicated to TechCrunch that King had been valued as a growth stock. Its lowered guidance belies that concept. The correction in its share price therefore isn’t surprising.
The company’s $150 million dividend works out to $0.469 per share. That’s a decent chunk for a company whose shares sell for $14.24, but only goes so far to plug the gap in the value of the company’s stock that went public at $22.50.
Finally, King’s “executive officers, directors, founders, and affiliated funds, including Bellaria Holding S.a.r.l of whom Apax WW Nominees Ltd is the sole shareholder, together representing 80% of outstanding shares, have agreed to a new lock up with the Company through the date following the Company’s announcement of fourth quarter and full year 2014 earnings.” That measure could ease pressure on the company’s shares. However, the announced lockup has done little so far to mitigate the beating its share price is taking.
King had a big hit. Market skepticism that the company couldn’t grow abounded. It appears that the bears were more right than the bulls.
The company is worth around $4.5 billion at current after-hours prices.