Image via CrunchBase
Online gaming company Zynga filed IPO documents with the Securities & Exchange Commission Friday, pricing its shares between $8.50 and $10.
If successful, the IPO will bring Zynga between $850 million and $1.15 billion at a maximum $7 billion valuation.
For comparison, the market cap of one of the largest gaming companies in the world, Activision Blizzard, is $14.2 billion.
Famous for its popular social games such as FarmVille and CityVille, Zynga originally prepared to file for an IPO several months earlier, but the IPO got delayed due to volatility on the stock market.
The $7 billion valuation is significantly lower than predicted; in May, Zynga was trading in the private markets at a valuation of around $10 billion.
Considering the mixed feelings about Internet company IPOs in the investment community, the recalibration may not be all that surprising. On one hand, Facebook’s initial public offering, which might happen in 2012, could end up as one of the largest IPOs in history, bringing back nice memories of Google’s $23 billion IPO in 2004. On the other, Groupon’s shares sunk after the company’s IPO in November, though Groupon shares did bounce back a bit after the end of its quiet period.
Zynga does have a few things going for it. It plans to sell quite a large stake of the company: 100 million shares (14.3% of its total), which might help reduce volatility. Its valuation is lower than expected, and the company is profitable, with earnings of $30.7 million for the first three quarters of 2011.
If all goes as planned, Zynga will hit Nasdaq under the ticker name ZNGA in mid-December.
What do you think? Will Zynga’s IPO be a success or a bust? Would you buy Zynga’s shares?
[via New York Times]
Zynga's New Headquarters
There is a Zynga RV at the entrance.
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