Shares of mobile gaming company King Digital Entertainment (NYSE:KING) popped today now that the company's quiet period has come to an end and analysts can initiate coverage on the company. The majority of these analysts issued Buy ratings on the company, with some putting the price targets even with the company's IPO price, which it hasn't hit in weeks.
So should investors get in on the action? On today's Stock of the Day, Motley Fool analyst Evan Niu has some concerns. He notes that a lot of these analysts work for the companies that underwrote King Digital's IPO, and nobody would like to see King get back to even more than these guys. A lot of the bullishness also has to do with the company's forthcoming earnings announcement (it will report first-quarter earnings before the bell on Wednesday) and the expectation that the company's currently undervalued. All that said, Evan's still not sold on King Digital and its one-hit wonder, Candy Crush, and he can't see anything that would make him buy and hold the company for the long term.
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