Zynga IPO set at $10 per share

CityVille creator prices itself at upper range of valuation in preparation to begin trading on NASDAQ Friday.

Zynga's initial public offering to be traded on Wall Street has been long in the making, with the casual game maker having first announced its plans to go public in June. After months of speculation as to how highly that IPO would be valued, Venture Beat reports today that Zynga has priced itself at $10 per share out of the gate.

After tomorrow's IPO, Zynga's streets will be paved with gold.

That figure falls on the upper end of Zynga's expectations, which it laid out as between $8.50 and $10 per share in its most recent SEC filing. At the $10-a-share valuation, Zynga stands to raise $1.5 billion with a valuation of $8.9 billion when the market opens, according to Venture Beat. That figure makes it the largest IPO for a technology company since Google went public in 2004.

Stock in the company will be traded under the ticker symbol ZNGA on the NASDAQ Global Market beginning tomorrow. Zynga disclosed to the SEC that it expects to sell 100 million shares in the company.

Notably, Zynga's opening valuation is substantially lower than initial reports that surfaced when the casual game company first announced its IPO plans. At that time, the company was expected to be valued at $15 billion to $20 billion. Those prospects have been dashed over the past few months, due to concerns over the company's growth prospects and profitability.

As part of its pre-IPO SEC disclosures, Zynga said that its revenues for the first nine months of 2011 stood at $828.9 million, with net income of $30.7 million. Zynga attracts some 227 million monthly and 54 million actively daily users, with games such as CityVille, FarmVille, and Mafia Wars.

Written By

Want the latest news about CityVille?

CityVille

CityVille

Follow

Discussion

22 comments
kuda001
kuda001

It's just a matter of time, competition will increase, Zynga will therefore have to build a loyal customer base if it is to succeed. I think in the next year we will see an increase in these type of games from more established developers and publishers.

Ronnie_Rim
Ronnie_Rim

Its a fad. Zynga will sink in a year or two when everyone gets bored of them, just wait and see.

NeilCardiff
NeilCardiff

@ACMC85 Obviously they are having top pay facebook vast sums to host their games on the site.

NeilCardiff
NeilCardiff

Welcome to the internet bubble 2.0™. Someone pass me a pin.

Richardthe3rd
Richardthe3rd

@ACMC85 Yep, 4% is a very disturbing amount. The fact they're only capturing that much for profit means there's not much wiggle room already on their books or their operations. This is just an example of aggressive accounting/book-keeping, which is usually a gigantic red-flag for investors. It's not uncommon for new IPOs, but in this case it's completely overblown.

Rocker6
Rocker6

@mayatola Its a fact that Zynga is very profitable,yeah,but for how long can they keep up public interest with games that solely rely on microtransactions? There will come a time when ppl get very bored of that,and then,the bubble will burst.Also,what if some kind of other Zynga-like game appears on the market that is much more appealing to the masses with cheaper microtransactions,less microtransactions,etc,what will happen then?

mayatola
mayatola

I'm not a fan of Zynga as much as anyone else here is, but I have a friend who is one of the higher ups in Zynga, and let's just say that hearing about how much money they make is vomit inducing. Just because a lot of you guys here wouldn't pay microtransactions for some stupid casual game doesn't mean that nobody else will. The fact of the matter is that these games aren't developed for people like you. They're developed for people who actually do pay, and it's enough to make them a lot of money. Geez, I even got to look at one of their menus for the kind of food they are served at their cafeteria (for when my friend was trying to get me a job there), which by the way is free to employees, and it's ridiculous. I could go on and on about my personal experience, but suffice to say, they make money, and they likely won't stop making money soon. Hate them as much as you want (I do), but to think they're just going to roll over after going public just because you wouldn't pay for a microtransaction? Get over yourselves.

Rocker6
Rocker6

Well,their games fully rely on microtransactions(tried playing some Mafia Wars,noticed it would take me months to get to a level of someone who just payed some money for few items,so I stopped playing),so they are just a bubble,waiting to burst.None of their games offer no innovations,so ppl will get bored,sooner or later...

poncho174
poncho174

Why do they think that they will be as profitable as google? I personally can't imagine that happening since these companies come and go very quickly.

ACMC85
ACMC85

4% of Revenue is Net income? With that kind of revenue, what expenses could they possibly have? How could a tech company based on digital content be so horribly scaled. This is such a poorly mismanaged company, from just a surface level observation.

Zloth2
Zloth2

@holtrocks, yeah a once in a lifetime chance to lose big money. Zynga is actually starting to attract compitition now from game companies that provide actual content.

holtrocks
holtrocks

This could be a once in a lifetime opportunity.

AuronAXE
AuronAXE

Gaming is only amazing when the developers actually care about making games and not taking money. Hence why a lot of smaller studios come out with amazing products. CD Projekt Red's Witcher is something like that. Zynga is not.

flipin_jackass
flipin_jackass

$15 - $20 billion? They must be kidding. When the novelty of these games wear off, this will turn into a penny stock.

monson21502
monson21502

zygna games are great!!! i can play runescape and world of war craft on my computer with no problems but i cant play farmville or cityville anymore because i guess they are too powerful for my weak pc....

PlayerPreferred
PlayerPreferred

It's nice to help people looking for a job, but Zynga? I've never heard of them.

JoVelociraptor
JoVelociraptor

Lets see... FarmVille ForestVille CityVille (doesn't makes sense, is a city or a ville) Still waiting for: S**tVille D**kVille and Zynga bankrupt.

kca89
kca89

People still play those annoying games where you're forced to add neighbors and spam requests to your friends?

Goyoshi12
Goyoshi12

[This message was deleted at the request of the original poster]

FatmanAB
FatmanAB

iPad ... MW ..... Zynga .... Wii Sports.......... Just Dance.............Brain Training...........Angry Birds...........Mario Kart.............................Justin Bieber ................. Rick rooled.............. what a stupid world im living in I used to love this world .. then i took a shoot at my head .. BANG R.I.P me