King Digital Entertainment Plc (NYSE: KING) went public last week and ended up setting records, but not the kind it was hoping for.
The maker of the extremely popular Candy Crush game became the worst performing IPO of 2014 when it debuted Wednesday, losing 16% of its $22.50 IPO price before closing.
The chairman and CEO of King Digital Entertainment lost $230 million on Wednesday as a result of the company's weak performance in its first day of public trading, according to a Wealth-X estimate.
On Friday, the stock continued to lose ground, with KING closing at $18.08, down 92 cents from its close of $19.00 the previous day.
All Its Eggs in One Basket
Scrambling for reasons to explain the poor showing, some analysts say King's IPO is weak because the company is a "one-trick pony," meaning it has no other monster gaming hits to back up Candy Crush when it eventually loses its popularity.
However, such prognostications may be unfair and premature.
That's because there are more than 180 "game IPs" in King’s Digital library. Candy Crush has proved to be the company's money-maker with 97 million daily active users, according to the IPO prospectus. Candy Crush accounts for 78 percent of King's sales. But King's other popular games include Farm Heroes Saga and Bubble Witch Saga, each of which has fewer than 20 million daily users.
On Mar. 31, King's share value regained a little ground, closing at $18.19, up 11 cents Friday’s closing price of $18.08 on a robust volume of 66.9 million shares.
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Sirius XM Holding Inc.'s Stock Struggles to Regain Lost Ground
In other news, Sirius XM Holdings Inc. (NASDAQ: SIRI) share price continues to nudge upwards, since it hit a low for the year of $3.13 on Mar. 27.
Still, the satellite-radio provider Sirius XM Holdings Inc. (NASDAQ: SIRI) has come a long, long way from the time its share price crashed at 5 cents in February of 2009.
Sirius' strong recovery from its low point was evident in its fourth-quarter and full-year 2013 earnings reported on Feb. 4, 2014.
The company generated record revenue of $1.0 billion and $3.8 billion in the fourth quarter and full-year, respectively, each up 12%. Net income for the fourth quarter and full-year were $65 million and $377 million, respectively, or $0.01 and $0.06 per diluted common share, respectively.
Income from operations was $245 million and $1.0 billion in the fourth quarter and full-year 2013, respectively. Adjusted EBITDA increased 41% in the fourth quarter to a record $326 million. Full-year 2013 adjusted EBITDA was $1.17 billion, an increase of 27% from $920 million in 2012.
Potential Lawsuits Not Hurting SIRI
Despite a myriad of law-firm of Sirius XM for potential stockholder claims as a result of the satellite-radio investigations company's proposed acquisition by Liberty Media Corp., its stock price is holding its own.
On Jan. 3, 2014, Liberty Media make an offer to buy Sirius for about $10.4 billion at a rate of $3.68 per share. The deal involves creating a new class of stock called Series C, adding 0.076 per share to give the company a total market value of as much as $27 billion.
Although the pending acquisition has triggered a slew of potential stockholder lawsuits, without Liberty Media, Sirius XM might not have been here today.
That's because in 2009, Liberty Media kept Sirius XM from going bankrupt with a $530 million loan. As a result, Sirius XM has been able to build a subscriber base 25.6 million strong. It's done so with a line-up of paid-radio choices including classical, rock, alternative, country, sports and live concerts, including the extremely-popular morning man Howard Stern serving as the company’s anchor. Moreover, having new cars equipped with XM receivers has also boosted the company's popularity and acceptability. However, Sirius XM still faces brutal competition from such digital radio competitors as Pandora Media Inc., AOLRadio and Apple Inc.
On Mar. 31, SIRI's share price closed at $3.20, up 4 cents from its closing price of $3.16 the previous day on volume of 66.9 million shares.
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MannKind Corp. Stock Volume Skyrockets
Meanwhile, MannKind Corp. (NASDAQ:MNKD) stock volume skyrocketed Mar. 31, with 30,262,584 shares changing hands, nearly four times its three-month average volume of 8,269,795.
The upsurge in volume is being fueled in part by the Valencia, Calif.-based pharmaceutical company that is developing inhalable insulin recent fourth-quarter and full-year's results.
Recap of 2013 Financial Results
Here is a recap:
For the fourth quarter of 2013, total operating expenses were $46.6 million, compared to $33.5 million for the fourth quarter of 2012, an increase of $13.1 million.
Research and development expenses were $29.0 million for the fourth quarter of 2013, compared to $25.3 million for the corresponding quarter in 2012, due to an increase in non-cash stock compensation expense of $4.3 million that was offset by a decrease in clinical trial related expenses of $1.3 million.
General and administrative expenses increased by $9.4 million to $17.6 million for the fourth quarter of 2013, compared to $8.2 million in the fourth quarter of 2012. The increase in G&A expenses was due to an increase in non-cash stock compensation expense of $6.0 million and increased professional legal and financing fees of $2.2 million as compared to the corresponding quarter of the prior year.
For fiscal year 2013, operating expenses totaled $169.4 million, compared to $147.0 million for fiscal year 2012. Total R&D expenses for fiscal year 2013 increased by $8.2 million, or 8.1%, to $109.7 million for fiscal year 2013 as compared to $101.5 million for fiscal year 2012, due to an increase in non-cash stock compensation expense of $14.2 million that was offset by a decrease in clinical trial related expense in 2013.
G&A expenses increased by $14.2 million, or 31.2%, to $59.7 million for fiscal year 2013 as compared to $45.5 million in fiscal year 2012, due to increased non-cash stock compensation expense of $17.7 million and increased professional legal and financing fees of $2.3 million in 2013 that was offset by the $6.5 million litigation settlement accrual recorded in 2012.
The net loss applicable to common stockholders for fiscal year 2013 was $(191.5) million, or $(0.64) per share based on 299.6 million weighted average shares outstanding, compared with a net loss applicable to common stockholders of $(169.4) million, or $(0.94) per share based on 180.9 million weighted average shares outstanding for fiscal year 2012. The number of common shares outstanding at December 31, 2013 was 369,391,972.
Cash and cash equivalents were $70.8 million at December 31, 2013 and $61.8 million at December 31, 2012. Currently, there is $30.1 million of available borrowings under the amended loan arrangement with The Mann Group.
Analysts' Consensus
Of the 5 analyst firms covering MNKD, 1 rates it a "strong buy," 3 a "hold" and 1 an "underperform."
On Mar. 31, MNKD's share price closed at $4.02 down 81 cents from the previous day’s close of $4.83 cents a share.
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