King Digital Entertainment Plc, maker of hit mobile phone game "Candy Crush Saga", expects to be worth up to US$7.6 billion (S$9.6 billion) when it goes public this month in the United States, amid concerns about its over reliance on the game.
King will hope to benefit from its focus on the estimated US$17 billion market for mobile game apps and avoid the fate of rivals such as Zynga Inc, which has struggled to make its games as popular on phones as they are online.
"Candy Crush," which involves moving candies to make a line of three in the same colour, was the most downloaded free app and top revenue-grossing app in 2013. The game accounts for nearly three-quarters of King's revenue.
Dublin-based King said on Wednesday it expects to price its IPO at US$21 to US$24 per share, valuing it at up to US$7.6 billion - slightly higher than Hasbro Inc, the 90-year old maker of Monopoly, Scrabble and Nerf.
"I think the bankers have priced the deal in a way so that initial investors can realise a first-day pop in the stock," said Josef Schuster, founder of IPOX Schuster, a Chicago-based IPO research and investment house.
Twitter Inc's successful IPO in November and a surge in Facebook Inc's shares have fueled speculation that other tech firms could go public, including music-streaming service Spotify, lodging website AirBnB and mobile payments company Square.
However, Schuster and other analysts questioned if King could maintain its breakneck growth rate.
"I think the valuation of a P/E ratio of 13 for a high-growth company is indeed reflecting a skepticism about the ability to continue growing at such a rapid pace," said Jay Ritter, a professor and IPO expert at the University of Florida.
"The ability to come up with future games and get people to pay for the game is a big question mark."
Riccardo Zacconi, who has led King since co-founding the company in Sweden in 2003, will hold a 9.5 per cent stake in King after the IPO. Zacconi, 47, worked with online dating site uDate.com Ltd till it was bought by InterActive Corp in 2002.