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Tomorrow Zynga, Inc. will disclose the terms of its initial public offering. Zynga plans to sell up to 15 % of its stock in a move that goes against the normal practice where Internet companies typically sell or float a lower percentage in order to limit supply and boost their share price.
Shares are expected to come out of the box at around $8.50 to $10 each. The company anticipates that it will raise approximately $1 billion from the float. This would value Zynga at $7 billion, a valuation that is lower than that initially thought likely and almost half of what the company had valued itself at in SEC documents.
Zynga 15% offering is an attempt to avoid the situation incurred by Groupon where the company sold 10% of its' stock in a move to limit initial supply and thereby increase the price -- only to suffer recently as its stock has tumbled below the initial offering price.
The companies' games, which include "CityVille" and "Empire Allies" are free for all users to play. Zynga makes money when players purchase "virtual goods" or in game items to expand their City or Empire.
Facebook will go public in 2012 at a valution in excess of $100 billion. This will make it the highest tech valuation in U.S. initial public offering history.
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Zynga is down the street from where I live and i have been seeing a lot of smiles lately over there. Ka-ching! Facebook is bigger than religion right now and any company in the FB Light will make huge $$. I'm doing a lot more social media work, and social media IS FB, bottom line! Twitter, YouTube, all the others are pretenders and FB makes up 90% of the social media universe, in my opinion. Go Zynga!