You can be on Entrepreneur’s cover!

Candy Crush CEO: If You Don't Get Why We Are Worth $7.6 Billion, Then Play Our Game King Digital Entertainment, the maker of hit games to play on your smartphone, filed documents with the SEC today outlining the terms of its upcoming IPO.

By Catherine Clifford

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

King Digital Entertainment, maker of the wildly popular mobile game Candy Crush, expects to be valued at as much as $7.6 billion in its initial public offering, according to documents filed today with the Securities and Exchange Commission. That astronomical figure may make your head spin, but the company's CEO has a simple response: Try our games and you'll understand.

In the prospectus filed with the SEC, King Digital Entertainment CEO Riccardo Zacconi talked directly to the reader.

"To really understand what we do, you'll need to take a short break from reading this document and play one of our games. Never had a go on Farm Heroes Saga? Then why not download it now. Within a minute or two, you'll understand the basics. And as you progress through the Saga, you will find that we have provided enough additional challenges and twists to keep it fun, but not so hard that you want to stop playing the game altogether," writes Zacconi. "We call it bitesize brilliance – the perfect way to spend three minutes of free time."

Related: The Keys to Candy Crush's Success

It's a pretty bold move: telling financial wonks to stop what they are doing and play a game on their phones. Candy Crush Saga, the company's most popular game, involves moving digital sugar candies around the screen to generate lines of three similar candies in a row. The game is free to play, but users pay for additional content or lives in "microtransactions."

Zacconi says that a key to the blockbuster success of Candy Crush and similar games, is that they are specially tailored for how people use technology right now.

"People are on the move; they multi-task and live their lives across multiple devices. Consumption habits have changed – mobile has meant that people consume more digital content than they ever have before, and they want to be entertained over short periods of time whenever and wherever they are," says Zacconi.

The business model depends on users being addicted to the game -- which they are. At the end of December, an average of 128 million users were playing King Digital games every day more than 1.2 billion times per day. By the end of February, just two months later, an average of 144 million daily active users were playing King Digital games more than 1.4 billion times a day. The overwhelming majority of those gaming hours were spent on Candy Crush.

Related: Sweet Victory: Candy Crush Developer Trademarks the Word 'Candy'

It's widely expected that King Digital will officially file for an initial public offering in the next month. Lead underwriters include J.P. Morgan, Credit Suisse and Bank of America Merrill Lynch, according to the prospectus.

The documents filed today establish the terms for its IPO. The Dublin, Ireland-based company has filed with the New York Stock Exchange to trade under the ticker symbol "KING." According to the prospectus, King Digital will sell 22.2 million shares for between $21 and $24 per share, raising between $466 million and $533 million. If King Digital is able to debut at the top end of its estimate, that would value the game maker at $7.6 billion.

That's a huge, eye-popping number, but the company has been growing at an exponential pace. Revenues grew from $22 million in the first three months of 2012 to $602 million in the last quarter of 2013. In the same period, the company went from booking a loss of $1 million to profits of $159 million. And its staff has been growing just as rapidly, going from 144 at the end of 2011 to 665 at the end of 2013.

King Digital admits that it's struggling to keep up with itself. "We have experienced a period of significant rapid growth and expansion in our operations that has placed, and continues to place, significant strain on our management and resources," the company said in its investor prospectus. "We cannot assure you that this level of significant growth will be sustainable in the future."

Related: In Going Public, Candy Crush Maker Hopes Investors Have a Sweet Tooth

Catherine Clifford

Senior Entrepreneurship Writer at CNBC

Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

This Fan-Favorite Masters 2024 Item Is Still $1.50 as Tournament Menu Appears Unscathed by Inflation

The pimento cheese sandwich is a tradition almost as big as the tournament itself.

Business Solutions

Visualize Data for Better Business: MS Visio is $23.99 Through April 16

Set your team up for success with a reliable tool for creating organizational charts, diagrams, and more.

Business News

I Designed My Dream Home For Free With an AI Architect — Here's How It Works

The AI architect, Vitruvius, created three designs in minutes, complete with floor plans and pictures of the inside and outside of the house.

Business Solutions

Scan Easier and More Affordably with This 20% Discount

iScanner is a mobile app that makes document management, editing, and sharing easier.

Side Hustle

This Dad Started a Side Hustle to Save for His Daughter's College Fund — Then It Earned $1 Million and Caught Apple's Attention

In 2015, Greg Kerr, now owner of Alchemy Merch, was working as musician when he noticed a lucrative opportunity.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.