Zynga IPO: Social Gaming Company To Raise $925 Million

(Reuters)- Zynga Inc could raise $925 million, less than previously planned, in what is still one of the largest and most hotly anticipated Internet IPOs in years.

The Facebook game maker plans to sell 100 million shares, or 14.3 percent of the company, at $8.50 to $10 per share, according to a regulatory filing on Friday.

Zynga's debut follows hot on the heels of Groupon Inc and LinkedIn Corp's this year, which helped revive a market for first-time share sales that had sputtered in recent years.

Based on the midpoint of Zynga's price range, the company could raise $925 million. It had previously filed in July to raise up to $1 billion.

The IPO would value the 5-year-old company, which made its name on viral games such as "FarmVille," at a range $7.7 billion to $9.04 billion, based on 904 million fully diluted shares, which catapults it to the top of the U.S. game industry.

Excluding stock options and based on 699 million shares, the company values itself as high as $7.1 billion.

Electronic Arts Inc has a market value of $7.73 billion, while Activision Blizzard Inc's is $14.21 billion.

While its games are free to play, Zynga makes money from selling virtual items -- such as tractors and weapons -- that players then use.

Mark Pincus, a serial entrepreneur before he founded Zynga, will hold a class of shares with 70 times more voting power than the regular stock that will be sold in the offering.

(Reporting by Liana B. Baker in New York and Brenton Cordeiro in Bangalore; Editing by Lisa Von Ahn)

(This story corrects the valuation in fifth and sixth paragraphs to a range $7.7 billion to $9.04 billion and a valuation excluding stock options and based on 699 million shares to $7.1 billion)
Copyright 2011 Thomson Reuters. Click for Restrictions

Comments

[Charles Queen]

07:10 PM on 12/14/2011

I myself think they have a whole lot more than that in assets.They could easily go off on their own and people would jump right in there to play the games and spend their real money just to try to get ahead of another player etc.I use to play mafia wars but I quit and do not play any games on FB any more.It's all about money,real mney.You see a person who just joins a game perhaps a week agao and suddenly he-sh is at a super high level and all.There is no way in hell that i would pay real money to play a game.It's not like you can actually win something because you can't.Ya,they could make it on their own

[fozzi58]

02:03 PM on 12/02/2011

OK so how do I get in on this IPO now? You know - us little people, not the Goldman Crooks investors....

[mikeinSeattle]

01:29 PM on 12/02/2011

Tech Bubble 2.0

[Jeff Ferguson]

10:26 AM on 12/02/2011

Recent studies have shown the entire social gaming market to have made about $6 billion, so this valuation for one company seems a bit steep...