Robbins LLP: King Digital Entertainment Plc Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that an investor of King Digital Entertainment plc (NYSE: KING) has filed a federal securities fraud class action complaint in the Superior Court of the State of California, County of San Francisco. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1933 in connection with the company’s March 26, 2014 initial public stock offering. King Digital produces and distributes digital games on multiple platforms internationally.
King Digital Misrepresents Its Business Practices
Since the company’s March 27, 2014 IPO, King Digital stock has dropped from $22.50 per share, to as low as $11.25 per share on October 14, 2014. According to the complaint, King Digital knew and failed to disclose certain material financial information in the company’s registration statement issued in connection with the IPO. King Digital’s registration statement highlighted the longevity of its Candy Crush game and the growth in monthly active users. In reality, a significant number of individuals paying to play Candy Crush Saga, which in the fourth quarter of 2013 accounted for 78% of the company’s gross bookings and was thus the primary source of the company’s revenue, were no longer playing the game. As a result of this decline in use, Candy Crush Saga became a weight on King Digital that hampered the company’s financial results.
King Digital Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.