Mark Pincus Sold Sales After Ipo

Mark pincus sold sales after ipo

Zynga Inc., the largest maker of games for Facebook Inc.’s website, raised $1 billion in its initial public offering, pricing the shares at the top of the marketed range.

The developer of games such as “CityVille,” “FarmVille” and “Mafia Wars” sold 100 million shares for $10 each, Zynga said in a statement.

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The company had offered the stock for $8.50 to $10 apiece. It will start trading today on the Nasdaq Stock Market under the symbol ZNGA.

The offering is the biggest by a U.S.

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Internet company since Google Inc. raised $1.9 billion in its 2004 IPO, data compiled by Bloomberg show.

Mark pincus sold sales after ipo

The game maker’s increasing ubiquity and expansion prospects appeal to investors, according to Colin Sebastian, an analyst at Robert W. Baird & Co.

Mark pincus sold sales after ipo

in San Francisco.

“Zynga and its games are becoming consumer brands and there is a lot of recognition for growth potential,” he said. “My guess is that the shares will be well-received.”

Founded by Chief Executive Officer Mark Pincus in 2007, Zynga doubled sales to $829 million in the first nine months of 2011.

The IPO values Zynga at as much as $7 billion, or 6.8 times revenue in the year through Sept.

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30. That’s more than three times rival Electronic Arts Inc.’s price relative to sales over the same period.

Electronic Arts, based in Redwood City, California, bolstered its own online services by purchasing PopCap Games this year. EA, the maker of “The Sims” and “Scrabble” for mobile devices had a market value of $6.9 billion, or about 1.8 times trailing 12-month sales.

Nexon Co., a Tokyo-based maker of games for Facebook including “Zombie Misfits,” started trading this week after raising $1.2 billion in an IPO, Japan’s biggest this year.

“You’re definitely going to see more competition” for Zynga as other companies expand their user bases, said Richard Greenfield, an analyst at BTIG LLC in New York.

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“On the other hand, I think it’s also going to bring more people into the overall social gaming space.”

Zynga planned to offer about 14 percent of its common stock, according to a regulatory filing. That compares with less than 10 percent for companies including Groupon Inc., LinkedIn Corp., and Pandora Media Inc., which made their public debuts this year.

Internet companies have used smaller free floats to boost initial demand for their stock, pushing the price higher.

Zynga sold all of the shares in the IPO, and plans to use net proceeds for game development, marketing and general corporate purposes, according to its filing.

Underwriters have an option to buy an additional 15 million shares to cover over-allotments, Zynga said in its statement.

That may allow backers including Avalon Ventures, Foundry Group and Google to trim their stakes, according to the original terms of the offering. Venture firm Kleiner Perkins Caufield & Byers, Zynga’s biggest shareholder after Pincus, didn’t plan to sell shares in the IPO.

The market value Zynga sought in its IPO was less than a $14.1 billion fair-value estimate of the company’s worth as of August, according to the prospectus.

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The company settled on a price range after taking into account recent IPOs that underperformed, according to a Dec. 10 filing. Morgan Stanley and Goldman Sachs Group Inc.

Mark pincus sold sales after ipo

led Zynga’s offering.

Groupon, the Chicago-based provider of online coupons, raised $805 million in its IPO last month, including the over- allotment option. The shares, which surged as much as 31 percent in the first weeks of trading, have since fallen 12 percent from their high.

Angie’s List Inc., the Indianapolis-based operator of a consumer-reviews website, raised $132 million in its IPO last month, including an over-allotment.

Mark Pincus Sells Millions of Shares to Zynga

The stock surged in its first day of trading before falling as much as 11 percent below its offer price.

Both Groupon and Angie’s List are trading above their offer prices. Sixty percent of the Internet or social-media companies that completed U.S.

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IPOs since 2010 are trading below offer price, Kevin Pleines, an analyst at Birinyi Associates Inc. in Westport, Connecticut, said in a Dec.

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13 research note. Buyers of the shares at their opening trade in the public market have lost an average of 32 percent, Pleines said.

Zynga gets more than 90 percent of its revenue from Palo Alto, California-based Facebook, operator of the world’s largest social network. Facebook is examining a $10 billion IPO that would value the company at more than $100 billion, a person with knowledge of the matter said last month.