Andre Yoskowitz
16 Dec 2011 1:14
The social gaming giant Zynga will IPO tomorrow, pricing in at $10 per share, for 100 million shares.
There had been recent discussion on whether the company could have a strong showing in its public debut, but it appears that at least some large funds and other deep pocket buyers are willing to pay up. 100 million shares is equal to just 11 percent of all shares, giving Zynga a market value of just around $9 billion.
Additionally, the IPO will raise Zynga $1 billion in cash, which they expect to use to expand their existing lineup and development on new games. The IPO is the largest since Google's in 2004, although Facebook is expected to trump both by a hefty amount.
Separating Zynga from other recent social IPOs, is the fact that the company is actually profitable. Others, like LinkedIn, Zillow and Pandora, have had years of losses, and profitability does not appear to be on the horizon despite their billion dollar valuations.
Zynga is the giant behind hits like FarmVille, CityVille, MafiaWars, Empires and Allies, Words with Friends, and Zynga Poker. The company has 4 of the top 5 most popular games on Facebook , and has over 200 million monthly users.
The company says it makes all of its revenue from just 3 percent of its players, who buy virtual items like new guns, poker chips, and upgrades for their farm.
Zynga will trade with the ticker ZNGA.