The Renaissance IPO ETF (NYSEArca: IPO) will add King Digital Entertainment (NYSE: KING), the mobile and social games maker, to its lineup following the close of U.S. markets on April 1.
King Digital, the maker of the wildly popular, raised $500 million by offering 22.2 million shares at $22.50 Wednesday, giving it an initial market value of $7.5 billion and making the stock eligible for inclusion in IPO, according to a statement by Renaissance Capital.
Shares of King tumbled 15.6% Wednesday, bucking the trend of impressive first-day pops by this year’s crop of IPOs. The average first-day gain for IPOs this year is 22%, up from 17% last year and 14% in 2012, according to Renaissance Capital data.
King will enter IPO after trading for just five days, though quick additions are not new for this ETF. IPO’s index allows for inclusion of new stocks after just five trading days, which allowed the ETF to be among the first to add shares of Twitter (NYSEArca: TWTR) last November. [Twitter Enters IPO ETF]
That flexibility could also mean IPO will be among the first ETFs to own shares of other highly anticipated upcoming IPOs, such as Weibo, the Chinese equivalent of Twitter, and Chinese e-commerce juggernaut Alibaba. [ETFs for the Next Batch of Chinese Internet IPOs]