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 |
| Price Range | $8.50-$10 |
| Ticker | ZNGA |
| Percentage of Stock Offered | 14% |
| Total Funding | $845M |
Financials:
| Item | Q3 2010 | Q3 2011 |
| Revenues | $170.7M | $306.8M |
| Net Income | $27.2M | $12.5M |
Valuation:
| Company | Market Value | Multiple of Sales for the trailing 12 months |
| Zynga | $7B | 6.8X |
| 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 |
Metrics:
| Metric | 2011 |
| Paying Users | 6.7M |
| Million Average Monthly Users (MAU) | 227M |
| Mobile Users | 9.9M |
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