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.