Candy Crush creator's share price dives on first day of trading

King Digital Entertainment price loses 9% in first few hours after flotation in New York, as traders value company less than banks

Riccardo Zacconi (2nd l), CEO of King Digital Entertainment, celebrates after ringing the opening bell at the NYSE. Photograph: Justin Lane/EPA

Candy Crush games studio King Digital Entertainment is in need of an extra life after its shares started their first day's trading in New York almost 9% below the initial price set just 15 hours earlier. The most highly valued British company to emerge from the new technology boom, King priced its shares at $22.50 (£13.60) on Tuesday, but traders on the floor of the New York Stock Exchange set the opening price at $20.50. The stock continued to fall during the opening hours, veering under $19.17, with concerns that King could suffer the same fate as rival games developer Zynga, whose shares are currently worth half their 2011 float price. King and its backers raised nearly $500m on Tuesday by offloading 22.2m shares, valuing King at just over $7bn, in private sales to investors arranged by the underwriting banks. However, minutes after chief executive Riccardo Zacconi – joined by fellow directors and two mascots dressed as a carrot and a boiled sweet – rang the opening bell, traders on the open market tore into that valuation. When pricing its IPO on Tuesday, King heeded the concerns among investors that it may be unable to produce another game as profitable as Candy Crush by opting for the midpoint in its projected $21 to $24 a share price. The shares began trading firmly below that $21 floor. The seven underwriting banks, JP Morgan, Credit Suisse, BofA Merrill Lynch, Barclays, Deutsche Bank, and RBC Capital Markets were expected to rush to King's defence by buying up shares to prop up the price, in a tussle with speculators that will continue until the closing bell. Candy Crush is played by 93m people more than 1bn times a day. It has dominated the smartphone games charts since launching on mobile in November 2012, and helped King raise revenues to $1.9bn last year. But the confectionery-themed game, in which players must make lines of sweets disappear from a grid by lining up three or more of the same colour, is no longer a top 10 download, despite still being the second-highest grossing game on iPhone in the US. Gaming enthusiasts themselves are divided over Candy Crush, with some arguing the format is derivative, while others see it as a high-quality mass-market creation