I really wanted to post this on the day of ZNGA's IPO on Nasdaq and reflect on it about 24 months from now. [article reproduced from Bloomberg]
Zynga Raises $1 Billion, Pricing IPO at Top of Planned Range
December 16, 2011, 8:30 AM EST
By Lee Spears and Douglas MacMillan
Dec. 16 (Bloomberg) -- 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. 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. Internet company since Google Inc. raised $1.9 billion in its 2004 IPO, data compiled by Bloomberg show. The game maker’s increasing ubiquity and expansion prospects appeal to investors, according to Colin Sebastian, an analyst at Robert W. Baird & Co. 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. 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.
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