Blog Post

Zynga seeks $1B in IPO

Online games powerhouse Zynga is shooting for $1 billion in its IPO, according to an amended prospectus filed on Friday morning.

The San Francisco–based maker of Farmville, Mafia Wars and other games expects to offer 100 million shares of Class A common stock at an expected price range of $8.50 to $10.00 per share. That could bring the company $1 billion in cash and place its overall value at about $7 billion, according to the filing. The 100 million shares represent 14.3 percent of total Zynga shares. Groupon(s GRPN) and LinkedIn, (s LNKED) two other web-centric companies that went public recently, sold less than 10 percent of their shares.

People will be watching this IPO carefully for signs that the Internet bubble is back. Groupon went public Nov. 4 at an initial share price of $20, saw it soar to $31.14 the first day, then subsequently saw its valuation fall off 46 percent last week. Groupon closed at $18.45 on Thursday.

This summer in its S-1 filing with the Securities and Exchange Commission, Zynga outlined the advantages it reaps from being a cloud-based entertainment provider. At that time, Zynga said it viewed its “scalable technology infrastructure” as a key advantage:

We have created a scalable cloud-based server and network infrastructure that enables us to deliver games to millions of players simultaneously with high levels of performance and reliability.

Zynga’s close reliance on Facebook, where it is the most popular provider of games, is a strength and a potential problem for Zynga should the relationship between the companies sour.

Zynga will trade on NASDAQ (s NDAQ) under the stock ticker ZNGA.

6 Responses to “Zynga seeks $1B in IPO”

  1. Jill Kennedy

    Yet another example of an insane overvaluation of a tech company that sells digital pigs. The egos that are controlling all these IPOs are decimating the industry. Everything has to be $1 billion. Millions are no longer good enough (thanks “Social Network”!) – the arrogance is stunning. Well, today I declare my media company is now worth $1 billion! (Because in today’s business climate – if you say it or put it in a press release, it’s true.)

    http://mankabros.com/blogs/onmedea/2011/08/03/onmedea-raises-50-at-a-1-billion-valuation/

  2. I bet they can do it. Zynga is a games powerhouse, and by that I mean, they’re good at getting people to give them money to play games, but their games can seem like addict-factories sometimes. Maybe not the #1 type of stock I’d like to own.

  3. Mosaic Technology

    I had definitely underestimated how big of a company Zynga was. They’re not one of the most talked about tech companies, but most people have played one of their games either on Facebook or mobile devices. This is a company that definitely knows how to make an addicting game.