Report: Zynga filing for IPO in the next two weeks

by Ben Gilbert on May 25th 2011 12:52PM

Alright, we're gonna get all of the boring business stuff out of the way up front: FarmVille creator Zynga is reportedly "poised to file" for its IPO (Initial Public Offering), effectively going from a private company to a public one. Financial firm Goldman Sachs is said to be "among the lead bankers" heading up the offering, which is expected as early as this week or "next week at the latest." Still with us? We know -- that was just as exhausting for us as it was for you.

So why should you care? Because the company could rival -- or handily best -- publishing contemporaries like Activision, EA, and Take-Two. The social game publisher's last valuation pegged it at a cool $10 billion, a number All Things D's Kara Swisher believes could climb even higher for an IPO. For comparison's sake, the largest public game publisher, Activision Blizzard, is valued at $13.07 billion as of mid-day today ... and that includes the Call of Duty series and World of Warcraft.

With a $10 billion IPO, Zynga would become the second largest game publisher in North America, eclipsing EA's current valuation of $7.81 billion. Zynga reps declined to comment.

Source: All Things D
More coverage: Games.com

Tags: activision, farmville, initial-public-offering, ipo, report, zynga

Reader Comments (47)

I guess crime really does pay.

@Kayonesoft
"Crime pays in mad ways" -Raekwon

@Kayonesoft
and the bubble gets bigger.

"Your fish are dead..."

@Gumshoe "ya i know i cant get them out of there"

Casual games ftw?

@Ospov

Sorry. Forgot the /s

Thought you all would've picked up on that...

If I had the money for it I'd short Zynga out of spite once they go public. As it is I'll be surprised if their stock does anything but plummet.

@Faceless Troll

I'm thinking the same thing, although my girlfriend's friend's husband works for them, so I technically can't wish for them to fail.

@baby sea tuna
I don't think you're prohibited from any such thing. If he's good, he'll recover quickly. For all you know, he's being talent-scouted right now. I have worked for places in the past that I haven't cared much about (not for too long, thankfully).

@Faceless Troll - Shorting them wouldn't be a good idea, unless we have a different definition of shorting. Generally speaking, when you short a stock, you are hoping that the price drops. That's how you make money. Every tech company to have an IPO this year has seen their stock skyrocket, if only for a few days before it levels off (higher than the initial price). Zynga brings in fat stacks of cash, and isn't likely to stop doing so any time in the near future, so I can't imagine that you'd make money trying to short it.

If you mean to say that you'd day trade their stock, then you've got the right idea. If you get in early enough in the day, you could potentially make a decent profit, as the stock could possibly hit some ridiculously overinflated high by the end of the first day or so. Unless there are some associated fees I don't know about, that make doing so unprofitable at low volume.

(The previous stock tips are brought to you by the letter I, as in I'm not responsible if you bet the farm and lose your ass.)

@Faceless Troll - Scratch that. I need glasses. I read your first sentence, then the sentence of another post.

I now realize that you did, in fact, know what a short sale is.

I disagree about their stock though. This isn't one of those companies with phantom income, that does an IPO in the billions on mere millions of revenue per year (if not yearly operating losses). Zynga is a cash cow, with proven revenue, that is likely to continue.

@BananaBoat - That's it. I'm going to the optometrist tomorrow. I've had enough of crap being blurry (I used to have better than 20/20 vision, and I told myself that they could put glasses on me when hell froze over, but this is ridiculous).

I read "10 billion" as "1 billion", and then the other figures correctly. In other words, I thought their IPO was for roughly 1/13 of Activision's valuation. Seeing how it is almost as much though... I'm inclined to agree with you. When this bubble bursts, it is going to burst hard. Anyone shorting it might have to hold the stock for quite a while though. If you have to close (cover, whatever you want to call it) before the bubble bursts, you might really get hammered.

I don't have the balls to even consider it (or the money, but I'm more inclined to blame my lack of cajones)

@Faceless Troll Incidentally, because I just now noticed. I'm not sure it's fair to compare an IPO's valuation with a company that has a strong track record like Blizzard, that's really a poor way of comparing anything.

When Blizzard went public their stock stayed well below the $2/share level for years but it eventually climbed up.They didn't have the benefit of Goldman Sachs pumping their prices. (PS - for anyone not in the know Goldman Sachs is hilariously corrupt.)

@BananaBoat The problem is they don't make public filings so you can't really say they have a proven revenue stream or strong fundamentals, and right now it sounds like Goldman Sachs is doing a lot of pumping on them to get their price to rise. I wonder how many shares GS owns?

Personally I'd wait for some downtick signs before shorting but the bubble is going to burst one way or another. Sadly their stock is going to be too expensive for me to even consider.

@Faceless Troll - I can't imagine how they couldn't be making money. Their games are simple, and they've got people hooked, almost as if they were selling drugs. 10 billion worth though? That's....a lot of microtransactions.

One day soon, be it this year, or the next, people are going to flinging themselves off of bridges because they bet everything on one of these bubble companies, and lost everything.

@BananaBoat Depending on how many employees they have to pay, what their marketing costs are like, and how many outstanding loans they have they might not have any cash left over after expenses. For all we know they could be existing solely on credit. Wouldn't be the first gaming company with poor money management.

Oh, God. That picture fits perfectly.

I guess this means the video game industry isn't immune to speculative bubbles and idiots in suits who are supposed to be experts with money, but spend billions on a jar of magic beans because there's a narrow chance they may raise in value to $100 billion because another guy in a suit who owns the magic beans told them so.

@(Unverified)

I was thinking the same thing.

"If these trends continue... Ayy!"

They made THAT much money off of FARMVILLE?!?!

=/

This company is a disgrace to real video game studios everywhere....Way to go everyone that paid for crap in this game....

@trinica They don't necessarily have billions of dollars, that's just how much the banks think they're worth. LinkedIn was valued in the billions even though they had a negative cash flow this year.

@Faceless Troll

I sure hope Zynga had a negative cash flow as well, though I kind of doubt it....They brought upon us that horrible plague of a "game," they don't deserve to make any money off of people's stupidity for liking it....

@trinica The good thing about going public is companies have to publish their profits for everyone to see, then we can find out how much they're really worth. All this talk about valuation is just getting people hyped for their stock so they can drive up the price and make a quick buck before it goes public.

DISCO STU DOESN'T ADVERTISE

Thank you. I was waiting for someone to say that.

It's a new era in gaming. It's going to keep climing beyond 1979. And then...EEEEEEEEEEEEEEEEEEY!

@CaptainProtonX

i wonder if people actually got this reference lol

People is so dumb that think companies make casual games because it's just easy to make them.
They always pursue money.

@Soiden

"People is so dumb that think"

Boy, you sure said it.

@Architecture
Rofl, that's what I was thinking. =P

@Soiden

Is this Antoine Dodson?

So dumb, f'real.

@Architecture

I guess there's some kind of typo or something in my post, isn't it? If that's the case, sorry about it, english isn't my first language.

If that's not the case, then I'm the dumb. No, I'm even dumber than everyone else ;)

People argue over who is more evil, EA or Activision. And the answer is Zynga.

@shard765 So, having a smart business model, executives who know what they are doing, and a product people want suddenly makes you evil? Come on.

Next stop: Gagaville on XBL!

$10 billion for Zynga. Bubble 2.0 continues. I'm looking forward to this one popping in two or three years.

@TheOtherJames

For real though. The financial speculation surrounding these .com 2.0 companies is ridiculous. If I had the money I would put it in day 1 and sell my shares the next day.

I feel sorry for the individuals who think some of these new public corporations will deliver.

I swear gaming is going backwards now.

@ShadowXIII

Good, I just got a great deal on a warehouse full of WiiSpeaks!

Big Band Stu says '23 Skidoo!'

All the more reason to fear October 30.

You guys seem smart. Can I put down an order for IPO stock before it starts selling on its first day? I lost a buncha money on Renren stock because I was 30 min behind opening bell.. :(

Yup, looks about right.

Goldman Sachs is well known for peddling toxic garbage. Someone should check whether they are naked shorting the stock on the side?

ST

This has the potential for being a big IPO in the wake of the LinkedIn IPO last week, which started the stock around 45 and went over 100, then dropped down to like 98 dollars on the first day. It's now down to $94 which is still too high. It way over valued. And it's P/E ratio is out of whack, but whatever. It was a good investment if you got in on the ground floor the morning the stock was introduced. I wouldn't touch it where it's at now.

Zynga may feed off the same 'bubble' And I suspect Twitter and Facebook will be even bigger IPOs when available. In the end, Zynga could end up being larger than most almost overnight and find themselves flush with cash.

@Starcade
Is it possible to place an order for an IPO the day before it goes on sale?

Ah, Ah, Ah, Ah, table 5. Table 5.

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Farmville

Report: Zynga filing for IPO in the next two weeks

Reader Comments (47)

Posted: May 25th 2011 12:55PM Kayonesoft said

Posted: May 25th 2011 2:19PM Typhonic said

Posted: May 25th 2011 3:58PM daytripper said

Posted: May 25th 2011 12:55PM anoffday said

Posted: May 25th 2011 12:56PM Gumshoe said

Posted: May 25th 2011 1:17PM dblue said

Posted: May 25th 2011 12:59PM Ospov said

Posted: May 26th 2011 3:52AM Ospov said

Posted: May 25th 2011 1:03PM Faceless Troll said

Posted: May 25th 2011 1:10PM baby sea tuna said

Posted: May 25th 2011 2:47PM sigma8 said

Posted: May 25th 2011 2:49PM BananaBoat said

Posted: May 25th 2011 2:55PM BananaBoat said

Posted: May 25th 2011 3:01PM BananaBoat said

Posted: May 25th 2011 3:03PM Faceless Troll said

Posted: May 25th 2011 3:06PM Faceless Troll said

Posted: May 25th 2011 7:07PM BananaBoat said

Posted: May 25th 2011 7:44PM Faceless Troll said

Posted: May 25th 2011 1:08PM (Unverified) said

Posted: May 25th 2011 2:07PM jrr said

Posted: May 25th 2011 1:10PM trinica said

Posted: May 25th 2011 1:15PM Faceless Troll said

Posted: May 25th 2011 1:17PM trinica said

Posted: May 25th 2011 1:23PM Faceless Troll said

Posted: May 25th 2011 1:11PM PR0F3TA said

Posted: May 25th 2011 1:25PM 343 Guilty Fart said

Posted: May 25th 2011 1:18PM CaptainProtonX said

Posted: May 25th 2011 1:34PM PR0F3TA said

Posted: May 25th 2011 1:22PM Soiden said

Posted: May 25th 2011 1:26PM Architecture said

Posted: May 25th 2011 1:32PM trinica said

Posted: May 25th 2011 1:34PM MrSmiley1 said

Posted: May 25th 2011 6:46PM Soiden said

Posted: May 25th 2011 1:37PM shard765 said

Posted: May 25th 2011 5:35PM PercyChuggs said

Posted: May 25th 2011 1:47PM TheBatman4141 said

Posted: May 25th 2011 1:55PM TheOtherJames said

Posted: May 25th 2011 6:29PM Falcon Punch said

Posted: May 25th 2011 1:56PM ShadowXIII said

Posted: May 25th 2011 2:09PM baby sea tuna said

Posted: May 25th 2011 2:09PM butaneko said

Posted: May 25th 2011 2:17PM daraikenu said

Posted: May 25th 2011 5:36PM GuardianLegend said

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