The "Candy Crush" IPO is Hitting These Tech Stocks

Shares of King Digital are down more than 10% on its first day of trading, as other stocks in the sector also drop.

Mar 26, 2014 at 11:20AM

The Dow Jones Industrial Average (DJINDICES:^DJI) had added 53 points as of 11:30 a.m. EDT. Microsoft (NASDAQ:MSFT) was one of the Dow Jones' worst-performing members, while tech stocks Zynga (NASDAQ:ZNGA), Glu Mobile (NASDAQ:GLUU), and King Digital Entertainment (NYSE:KING) also experienced notable sell-offs.

Core durables disappoint
Perhaps limiting the Dow Jones' rally, data on core durable goods orders came in worse than anticipated on Wednesday. According to the U.S. Census Bureau, orders of durable goods -- excluding transportation items -- rose just 0.2% last month, less than the 0.3% economists had projected.

Sales of durable goods (manufactured products designed to last for many years) are considered a solid economic indicator. While the miss was not particularly bad, the number suggests the U.S. economy is performing worse than expected.

Microsoft hit ahead of expected Office unveil
Microsoft shares shed 1% in early trading. There wasn't much news to explain Microsoft's drop; investors may have simply been selling shares ahead of a highly anticipated announcement.

On Thursday, new Microsoft's new CEO Satya Nadella is expected to unveil a version of Office for the Apple iPad. The release should boost Microsoft's Office revenue significantly in the coming months. However, the tech giant's shares have already rallied significantly in recent sessions as investors bought into the rumor ahead of the formal unveiling.

MSFT Chart

MSFT data by YCharts.

King Digital IPO drags down mobile gaming stocks
King Digital stock opened for trading on Wednesday. However, unlike other recent IPOs, the company's shares tumbled in their debut, shedding nearly 10% in late-morning trading. More than 80% of King Digital's revenue comes from its hit mobile video game Candy Crush.Investors are notably skeptical of the company, suspecting that it may not be able to replicate that success going forward.

Other stocks in the sector, including Zynga and Glu Mobile, are also selling off, likely because of the move lower in King Digital shares. Although Zynga and Glu Mobile offer games that are distinctively different from Candy Crush, they compete largely in the same space. Both Zynga and Glu Mobile focus on small, somewhat simple games released primarily for mobile devices, appealing to a casual audience. With so much skepticism surrounding King Digital, investors in these rival  companies may be uneasy.

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Sam Mattera has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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