Zynga IPO: The Countdown Begins

Social gaming titan Zynga’s recent filing for an IPO later this year has captured the imagination of Wall Street. It’s success or failure in it’s debut and as a public company will have a far reaching impact on the entire industry. The following articles examine Zynga’s postion within the marketplace.

The Los Angeles Times  ” While Zynga has not yet priced shares for the public market, some investors are speculating that shares could be as high as $20 or more, which would give Zynga a market valuation of roughly $16 billion. “

Wall St. Cheat Sheet  ” Zynga CEO and Harvard Business School Alum Mark Pincus is demonstrating a very cunning business acumen, also accumulating $1 billion in cash reserves v. $234 million in liabilities. Other impressive stats for the company are its 2,000 employees, 148 million users (across 166 countries), and the fact that none of its senior management is under 40 years old (contrary to the usual fare for tech startups). “

The Huffington Post   ” Zynga sees its market opportunity in the context of: a) the growth of social networking; b) a culture of the “app economy” whereby developers have access to social network platforms; and c) A “free-to-play” gaming culture that allows users to play games for free, thereby attracting a broader set of users and a richer ecosystem for social interaction within the gaming environment. “

CNNMoney  ” The big remaining question for Zynga is how underwriters and investors value the its IPO. Initial reports valued the company at $10 billion. It would be very considerate of Zynga to list at that price and leave money on the table, but it’s not going to happen. Remember that LinkedIn, which is expected to make $420 million this fiscal year, was worth $9 billion on its first day of trading. By that measure, Zynga could debut and see its value rise above $20 billion. “

Forbes  ” Zynga’s valuation is high relative to its peers. While Zynga has yet to set an offering price, Zynga is valued at $15.4 billion on the SharesPost secondary exchange — more than Activision Blizzard (ATVI) and Electronic Arts (ERTS) — worth  $13.5 billion and $8 billion, respectively, according to Bloomberg. “

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Filed under CityVille, Facebook, FarmVille, gaming, mobile, social games, Virtual Currency, virtual goods, Zynga

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