GAME FOR MORE
New York, Dec. 2 (Reuters): Zynga Inc plans to sell an 11.1 per cent stake in a scaled-back initial public offering that will value the Facebook game maker at as much as $9 billion on a fully diluted basis.
The leading social games maker plans to sell 100 million new shares at between $8.50 and $10 each, according to a US regulatory filing on Friday.
At the midpoint price, the IPO could raise $925 million, which would make it the largest from a US Internet company since Google Inc raised $1.7 billion in 2004.
Five-year-old Zynga made its name on viral games such as FarmVille, among the most popular on Facebook. While Zyngas games are free to play, the company makes money from selling virtual items — such as tractors and weapons — that players then use.
Based on a fully diluted share count of 904 million, which includes existing shares and stock options, the IPO price values Zynga at $7.7-$9.04 billion.
In a filing two weeks ago, the company said a third-party analysis had valued it at $14.05 billion.
While the valuation has been cut, Zynga would still be among the largest publicly traded US game developers after it debuts on Nasdaq under the ZNGA symbol.
At present, video game developer Activision Blizzard Inc has the industrys highest market value of $14.2 billion, followed by Electronic Arts Inc at $7.7 billion.
Zyngas debut will follow IPOs this year from Groupon Inc and LinkedIn Corp, which helped to revive a market that had sputtered in recent years. Facebook is gearing up to go public next year.
Mark Pincus, a serial entrepreneur before he founded Zynga, will hold a class of shares with 70 times more voting power than the regular stock that will be sold in the offering.
Google, one of the early investors in Zynga, will be offering about 1.7 million shares, according to a regulatory filing. Other companies selling shares include Institutional Venture Partners and Union Square Ventures
Deep-pocketed rivals, from Walt Disney Co to Electronic Arts, are starting to muscle in on Zyngas turf.
The company said its IPO represented 14.3 per cent of 699 million common shares, excluding restricted stock.