Zynga IPO Date Reportedly Set For December 15

By Anthony Hughes and Robert Sherwood
NEW YORK, Nov 30 (IFR) - Zynga is expected to price its shares on December 15 in one of the most highly anticipated IPOs of the year.

The IPO is expected to value the fast growing social gaming company at around $10bn, below some earlier estimates of as much as $20bn.

The company is targeting a pricing range of $8-$10 per share, according to the source.

Though the details are still being finalized, Zynga is likely to sell around 10% of its shares, including both new and existing shares, to the public.

Having risen to prominence on viral games such as "FarmVille" and "Mafia Wars", Zynga is widely expected to file terms on Friday for an IPO that would generate around $900 million in proceeds at the midpoint of the price range, the source said. Underwriters could ultimately upsize the deal based on demand.

The timetable suggests the banks will opt for a standard nine-day roadshow, paving the way for a Nasdaq debut on December 16, a Friday.

Zynga spokesman Adam Isserlis declined to comment.

Another source familiar with the matter told Reuters on Wednesday that Pincus, the CEO, will not sell shares and neither will Kleiner Perkins, one of Zynga's main venture capital backers.

In its latest filing with the Securities and Exchange Commission on November 17, the company said a third party performed an analysis that valued the company at $14.05 billion.

Zynga first filed plans to go public on July 1, flagging an offering in the order of $1 billion at that time.

Morgan Stanley and Goldman Sachs are lead bookrunners on the deal, with Bank of America Merrill Lynch, Barclays Capital, JP Morgan and Allen & Company also named in the syndicate.

Their underwriting committees at the banks involved are finalizing their participation in the offer.

Sources told Reuters on Tuesday that Chief Executive Officer Mark Pincus will lead presentations to investors, along with Chief Operating Officer John Schappert and Chief Financial Officer David Wehner.

Zynga's games have 54 million daily active users and 227 million monthly active users in 175 countries, mostly via games on Facebook.

The company is on track to become one of the fastest Silicon Valley companies ever to turn over more than $1 billion a year in revenue. Founded in 2007, the company increased its annual revenue from $19.4 million in 2008 to $597.5 million in 2010, and generated revenue of $828.9 million in the nine months to September 30, 2011. Over the same period, net income was $30.7 million and adjusted EBITDA $235.5 million.

(Reporting by IFR's Anthony Hughes and Robert Sherwood; Additional reporting by Reuters reporter Liana Baker)
Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[DorightWoman]

05:48 PM on 12/05/2011

the zynga games are not stable, they are always having glitches, loading problems, it definitely puts a damper on it and I would never invest in zynga until they resolved their programming problems. They do not use test databases for their games and it shows. The constant "refreshing" and "wait, we're saving your game" and other interruptions so they can offer "specials" to buy things, is more than aggravating. zynga focus isn't offering quality games that are stable and work on a consistent basis.

[Steve the Humanist]

03:22 AM on 12/01/2011

I wouldn't buy a penny of their stock, not that I would ever buy any stock. I play Yoville and it's a hot mess. They seem so disorganized and keep changing their minds, and the game itself needs a serious overhaul. The "special releases" are coming more and more frequently to try and gin up excitement and get people to spend money on the game. The early days of Yoville were great, but it's just not the same anymore because they're pumping out too much stuff and the game is becoming bloated and unwieldy.

And the fact that you can play it fairly easily without spending a dime, can't instill a lot of confidence in the investors. And the minute they make it a pay to play game, it will die. And all it takes is a game here or there that takes away Zynga's thunder, and "poof" no more Zynga. I'm already moving over to 6waves Games. I just don't see how these types of companies can survive long term.

[NerdyStudent]

12:25 AM on 12/01/2011

They could bring back Geo-Challenge.

[Sunwyn Ravenwood]

11:47 PM on 11/30/2011

Darn, I was hoping they were going to announce that they were going to stop loading all their new games up with annoying quests and creepy characters like that hideous thing on Frontierville. I not only won't play any of their new games I even stopped playing Farmville.

[Sorenson]

09:51 PM on 11/30/2011

Just in time, the pump-and-dump hedge fund managers were getting bored after ripping off Groupon investors for all they could.

[Steven Travis]

09:47 PM on 11/30/2011

I read this hoping that the big announcement was that the virtual plants people are farming are actual plants on actual farms; this would result in their lives not having been a huge waste of time.

[squat6971]

08:39 PM on 11/30/2011

These are Bad People -- they forced the founding programmers to return their options, or be FIRED.
I hope they choke on their IPO.

[jokamachi]

08:03 PM on 11/30/2011

Zynga's new games suck balls. FarmVille and Mafia Wars were fun, though.

[exPatPatti]

11:42 AM on 12/01/2011

Mafia Wars rocks.

[LittleSanityLeft]

06:55 PM on 11/30/2011

Anyone buying stock in this company is looking to lose cash. They don't have enough bankable IP's to leverage. They, like others seeking IPO status are just in it to make the early investors multimillionaires then sit back as the ship inevitably sinks.