Zynga Prepping to Go Public Before New Year
Zynga Inc. will take the show on the road to promote its initial public offering next Monday. The plan is to price its shares on Nasdaq before the New Year under the symbol “ZNGA.”
The social gaming leader behind the popular Facebook game “FarmVille” follows in the footsteps of recent tech companies to test public markets, including Groupon (NASDAQ:GRPN), LinkedIn (NYSE:LNKD) and Angie’s List (NASDAQ:ANGI), both of which became publicly traded companies in the last month.
Zynga filed for an IPO of up to $1 billion on July 1. The four-year-old company is estimated to be worth about $14 billion — more than video game heavyweight Activision Blizzard’s (NASDAQ:ATVI) $13.85 billion market capitalization, or Electronic Arts’ (NASDAQ:ERTS) $7.2 billion.
Though Facebook, which is preparing its own IPO for 2012, takes a 30% cut of any revenue Zynga earns through games on the social networking site, Zynga has a proven track record of profitability.
With more than 260 monthly active users on Facebook, Zynga has proven adept at herding current players to its free games. Its unique paying players for the 12 months ended September 30 stood at approximately 7.7 million.
However, while Zynga dominates social gaming, it has to contend with a growing pool of deep-pocketed rivals, including Walt Disney Co. (NYSE:DIS).