Zynga is expected to public next week, raising perhaps as much as $1 billion. According to Bloomberg, it looks like the company has already filled orders on 100 million shares. The deal could actually be the largest tech offering since Google (Nasdaq:GOOG), which raised $1.67 billion in 2004.
Here’s a quick profile:
Background: Founded in 2007, Zynga is the top social-media gaming company on the Facebook platform. The games are all free, but the company generates revenue through advertising as well as the sale of digital items (say, a virtual pick or a
plow). Some of its titles include CityVille, FarmVille, Mafia Wars, Words with Friends and Zynga Poker.
From 2008 to 2010, revenue surged from $19.4 million to $597.5 million. For the nine months ended Sept. 30, 2011, revenue was $828.9 million.
To continue growing, Zynga is trying to move away from its dependence on Facebook by building its own gaming platform, which is called Project Z. The company also is significantly investing in mobile games.
Terms of the deal:
|Underwriters||Morgan Stanley and Goldman Sachs|
|Number of shares to be offered||100 million|
|Percentage of Stock Offered||14%|
|Item||Q3 2010||Q3 2011|
|Company||Market Value||Multiple of Sales for the trailing 12 months|
|Electronic Arts (Nasdaq:ERTS)||$7.2B||1.85X|
|Activision Blizzard (Nasdaq:ATVI)||$13.9B||2.86X|
|Take-Two Interactive (Nasdaq:TTWO)||$1.2B||1.25X|
|Million Average Monthly Users (MAU)||227M|