Candy Crush get crushed during Wall Street debut on 26.3.2014

Let's take a rest and talk about something else. Don't always just talk about our little small boy KLSE. Look outside once awhile for some refreshment and some fresh air.

 

I think almost everyone with smartphone could be familiar with Candy Crush game. It is such an addictive game. It can be quite tiring playing the game without yourself knowing it at first. But it is good to kill time especially when you are stuck in airport due to flight delay. My wife is very good at it. She had completed the whole game and is awaiting for them to create new levels. The last level is 365, just to let you know if you haven't reach there yet.

The company that owns the game, King, was listed in Wall Street on 26.3.2014. But apparently did not get a good showing during the first day of listing. Yesterday I heard news saying that the game drew a revenue of USD800mil ! It is just amazing. America is really an amazing consumer market.

Some on-line news reports below.



Mascots dressed as characters from the mobile video game 'Candy Crush Saga' pose outside the New York Stock Exchange ahead of the IPO of Mobile game maker King Digital Entertainment Plc yesterday. – Reuters pic, March 27, 2014

King Digital, maker of the wildly popular Candy Crush video game, got a sour welcome on Wall Street yesterday as shares tumbled some 15% in their first trading day.

King's initial public offering (IPO) raised US$500 million (RM1.6 billion) from the sale of 22.2 million shares, as the British company sought to capitalize on the popularity of Candy Crush Saga, which boasts some 97 million players worldwide.

The shares trading under the symbol "KING" opened lower than the offering price of US$22.50, and ended the session on the New York Stock Exchange with a loss of 15.56% at US$19.00. The slump gives King a market value of US$5.98 billion, below the optimistic estimate of US$7.6 billion.

"This is not a surprise," said Trip Chowdhry, analyst at Global Equities Research, who said King was seeking to cash in on a fad. "This company is going to be the next Zynga unless they do something very different," Chowdhry said, referring to the troubled social games maker. "The investors who went today or yesterday were investors that bought the stocks when Candy Crush was at peak. This is a peak, the only way they can go from here is down."

The business makes money from players buying hints and other help to aid their climb through some 500 levels of the Tetris-like game. But some analysts have questioned King's staying power on the back of a game whose popularity could wane over time as users tire of it.

No more cash cow

The company's follow-up games have not attained the same level of popularity. IHS mobile analyst Jack Kent said the success of Candy Crush has made the company the leader in mobile games, but added that "Candy Crush Saga will not remain a permanent cash cow and King must prove it can repeat this success with new titles."

The company says its games, which also include Farm Heroes and Pet Rescue, are installed on 600 million mobile devices, and played over 1.4 billion times a day – more than one billion alone for Candy Crush.

Profits in the fourth quarter reached US$159 million. The King IPO comes amid a sharp uptick in new companies entering the market. The US IPO count stood at 46 through March 11, the highest level for this time of year since 2007, according to Dealogic. King's arrival comes as investors are keen to buy into the next rising technology star but are wary of young companies being overvalued, especially in the world of games where popularity can be fleeting. Some analysts also fear that the rush of IPOs may signal an overvalued market similar to the tech bubble that burst in the early 2000s.
Zynga, creator of the once-mighty "FarmVille" game, lost 40% of its value after entering the market in December 2011 with a valuation of US$7 billion.

King said in a securities filing that it believes it has a "repeatable and scalable game development process that is unparallelled in our industry."

"A key principle for King is that no individual game session should take more than a few minutes," King Digital chief executive Riccardo Zacconi said in the filing. "We call it bitesize brilliance – the perfect way to spend three minutes of free time." King said the proceeds from the IPO would go for "general corporate purposes," possibly including acquisitions. – AFP, March 27, 2014

******************
Yahoo News (26.3.2014)

King Digital Entertainment (KING): The Candy Crush Saga game maker began trading on the NYSE this morning and as the name of it's hit game suggests, the stock got crushed. Shares were down by as much as 12% early in trading. Prior to this flop of a debut cynics had been comparing King to Zynga (ZNGA). At this point King investors should be so lucky.

Presbhd - racing higher Part 5

Today is the highest rise in price in a single day, a staggering increase of 42 cents or 12.1%. Gained the 2nd spot on the Top Gainers chart as well.

 

It is a long overdue surge in price since the company announcement for bonus issue a month ago. It is a worthwhile wait indeed.

 

Monthly price movemnet since May 2013.

31/05/2013	1.77
30/06/2013	1.86	5.1 %
31/07/2013	2.12	14.0 %
30/08/2013	1.92	(9.4) %
30/09/2013	2.04	6.3 %
31/10/2013	2.32	13.7 %
30/11/2013	2.60	12.1 %
31/12/2013	2.88	10.8 %
30/01/2014	2.96	2.8 %
28/02/2014	3.30	11.5 %

31/03/2014       ?            ?

Its price closed at RM3.89 on 24.03.2014.

 

Dividend - the real cash

What is the purpose of investing in the stock market?

 

Only one thing: sustainably making money in long run. One way is through value investing.

 

Start small and accumulate progressively. Believe me, you will build up your confidence in stock investment and get satisfaction when you start to see your shares values grow.  What more if at the same time continuously receiving the dividends. This dividend is real cash and that, in a way, to remind you that your money is working hard for you.

 

You may hear stories of people making lots of money by punting the stock market. It definitely sounds exciting. However, don't sway by such stories. Everyone has their story. You too could create your own success story.

Throw yourself a challenge. Pick one good stock. Invest small in it and keep for 4 quarters. Review after that period. You will start to learn and appreciate what Value Investing really mean.

Presbhd is already an elite share. I will continue to invest and stay invested in this company as long as the dividends keep flowing in.

 

Its price closed at 3.47 on 21.03.2014.

Never ending asking for stock recommendation

Over the last weekend was certainly one of the hottest and hazy day to hit the golf course. However, golf game is a good place not only as a form of exercise but also an ideal place to exchange business preposition. Haven't you heard of people said business deals are done not on the meeting table but on the golf course. It is definitely very true. If you know what I mean.

Of course, as usual, after exchange of pleasantry and after a few punts around the par ways, business were discussed while waiting for our turns to hit our balls. After awhile, stock market was everyone topic. What interesting to note is everyone seems to have make money from the recent market rally. The question is no longer about how much one has made but more on the ego challenge of his tips that has been proven correct and spot on. Some of them even challenged me to provide more stock pick. Those few stocks that I told them months back had already rallied. To them those are old stories. Now they wanted to know the new one. I reckoned this is a never ending venture and it is never enough no matter how many stocks you had fed them. You just need to keep on topping up my stocks recommendations all the time until, I suppose, the market crashed. That is when all stock talks and tips stop. You see, this kind of mentality does not only confine to most retail players but also to those established businessmen. I suppose the reason why they wanted me to join them for their golf game is to have someone to give them a moment of pause to reflect on their stock market game. Needing someone to give them the voice of reasoning on stock market matters. I never minced my words. I simply told them the way they are playing the stock market is dangerous. They might make a million now but they could easily lose two millions or more if they continued to play the market the way they played now.

Now, why keep on wanting more stocks recommendations when we already have a few that are showing good results. Good results in term of company performance as well as stock price performance. Most important, the company growth story is still very encouraging and exciting. I could understand if one wanted to diversify because of one has big funds to spread all over. But if one was to exit one stock and re-enter into another using the same limited fund, I don't see it is a good reason to justify such a move unless there is a change in company's fundamental.

Very often when I told people the above, they will disagreed with my view. Granted. Their reasons could be one of the following:- price has peaked, valuation is expensive now, take profit and buy later when price drop, take profit and switch to cheaper stock, price will crashed, not for long term, stock market is to make quick buck only, long term is for those with deep pocket, the price is not moving, etc.

Well, it is up to every individual. It is your money. It is either you teach your money how to make more money for you or the money teaches you how to be more careful with the money.

As parting shot for now, Presbhd is still the shining star and will continue to shine. However, it is no longer an affordable stock it used to be compare to 2 years ago, but it is still worth investing into the stock for long term. By the way, Bursa has approved the Bonus issue application by Presbhd yesterday.

 

Later, I will explore one stock that is 'affordable' to everyone and of course it is only suitable for the long term investor. My team is still at the final stage sifting through the numbers.

 

P/S: I differentiate between 'affordable' and 'expensive' as that the former means you could buy more of the stocks with less money and not necessary the stock is expensive whereas the latter means you will lose your pants if the stock crashed. In contrast, certain stock could be affordable but might considered expensive even though the stock price is less than 50 cents and this is the kind of stock that attracts the most attention from the retail players.

OCK - the oldman comes knocking Part 2

Today OCK has a strongest showing ever with impressive volume of 15.8 million shares changed hands. Price up by 14 cents and closed at all-time high of RM1.05. It also crossed the RM1.00 magic number convincingly.

 

There are many highest or first today. Highest volume since its listing in 17.07.2012. Highest rise in a single day of 14 cents. Highest all-time close at RM1.05. First time crossed RM1.00 mark. First time reached Top 20 Gainers list. First time reached Most Active list since listing.

 

 

Friend J : Z, why your OCK not moving?

 

UncleZ : What you mean by 'my' OCK? But I know you will make a lot of money with it.

 

Friend J : So many stocks have gone up.

 

UncleZ : Of course friends. If you have crystal ball, then it is different story. Everyday you can pick one stock and make ton of money.

 

Friend M : Your Presbhd, Ecowld and DSonic are very spot on. But...

 

UncleZ : I am just lucky.

 

Friend M : But OCK is lack of power. It seems.

 

UncleZ : No worry. It will come. I have confident with Sam.

 

Friend M : You met him before?

 

UncleZ : Of course. I won't go in big way unless I know the person behind the company. That person must be really a working type of person and has passion and ambition with what he does. Also, must have fire in his belly. Not just talk all the way, all the time without results.

 

Friend J : You mentioned in your blog that 2014 is good for OCK. It seems we have lost the opportunity cost.

 

Friend M : Ha ha. Didn't Z said he will cover our losses if fell below,.. what price again you said?

 

UncleZ : I am just kidding. Anyway, if OCK failed to perform this 2014, I will pay for the golf course fee for all of us for the whole of next year.

 

Friend M : Deal ! Wait.. please define "perform". What price?

 

UncleZ : If OCK reached , then you guys pay the golf course fee for me for the whole of next year.

 

Friend J : Alright. Deal !

Friend M : That's still a long way to go. Anyway, I also take up your bet. Deal !

The conversation happened last two weekend. After today market closed, Friend J texts me to inform that he hope I would win the golf course bet.

 

Its price closed at RM1.05 on 18.03.2014.

OCK - the oldman comes knocking

Today OCK has a serious surged in price and hit all-time intraday high of 0.875. The previous all-time intraday high was RM0.86 recorded on 19.12.2013. That was few months back. How many have the patience to have keep until today? I doubt many would except maybe a few hardcore long term investors. In fact one of my associate was so impatient with the stock and nicknamed it as oldman stock because it is slow and hard to wake up.

As usual, question was asked now whether the new high price could be sustained? It happened many times the price had came down after it was up. This was due to one of the substantial shareholders was trading the stock. On the positive side, they are also providing the support when it is needed. Nevertheless, today rise have provided some relive for those that have invested long in this stock

For those who have invested in this stock for long term would not be wasted as you will be rewarded for your patience before this year is out.

 

Its price closed at RM0.85 on 11.03.2014.