Zynga Gears for IPO as Web-Boom Rages
Sources close Zynga have stated the creator of social media and digital entertainment products plans to file its IPO with the SEC by next week at the latest. News of Zynga’s plans comes on the heels of major victories from the company’s web 2.0 counterparts in recent market activity. Just last week, LinkedIn (NYSE:LNKD) rocked wall street by exploding out of the gates from its IPO, ending the week at more than double its initial offering price, and is currently still trading at that value. (Check Out “LinkedIn Stock: Which Shareholders are the Idiots?) Yesterday Russian search czar Yandex (NASDAQ:YNDX) made its debut on the Nasdaq (NASDAQ:NDAQ) to a very warm reception, seeing its value appreciate more than 50%.
Zynga is best known for its popular interactive games, FarmVille, Mafia Wars, and latest release CityVille. All these games are featured on Facebook and Apple (NASDAQ:AAPL) iPhones — hence the mass market distribution. How else can you get Goldman Sachs (NYSE:GS) to orchestrate your IPO?
Unlike some less mature social media darlings, Zynga boasts impressive financial numbers to substantiate high initial valuations. The company reported profits of an estimated $400 million in 2010 with reported net revenues of close to $850 million. Zynga claims to have over 250 million active users and early estimates are pegging the firm’s market valuation at close to 9 billion dollars, though that valuation is expected to increase by the date of the IPO. The Seattle based company recently hired 800 new employees bringing its total workforce to 1,500 hired hands, working in 13 offices across six different countries.
Once again evidence of the web 2.0 craze is blazing a trail through the internet and financial industries, as investors, bankers, and web-users continue to remain unsated in their appetite for social-media enterprises. The outcome of the Zynga IPO is sure to make waves as investors look eagerly towards Facebook’s pending entrance to public markets.