The undisputed top dog in the world of Facebook Games, Zynga, has just announced that they’re making plans to go public in the near future – prompting an estimated valuation between 15 and 20 billion dollars. Assuming they go with the popular low-float stock option model, they’d be allowing 10% of their shares to be sold to the public.
The San Francisco-based office is reportedly set to file their papers with the Securities and Exchange Commission as early as Wednesday – though an official did not respond to emails in regard to the submission.
Zynga is planning to raise between $1.5 to $2 billion for their IPO, which stands for Initial Public Opening for those not familiar with the world of stocks. An IPO is made when a company issues their stocks or shares to the public for the first time – and can be done at any point during a company’s existence. Zynga seems to be in negotiations with Morgan Stanley, one of the world’s largest global financing firms, to lead the way through the deal. Insiders believed, up until a few weeks ago, that Goldman Sachs would be the go-to firm for the IPO – but things look to have changed within the social network-based studio.
Provided the developer does file their request this week, it’s likely that we’ll be seeing their shares go public in the fall – following the popular business-based social website LinkedIn, who had an excellent share turnover last month. Zynga also finished up discussions with several banks on the subject of raising a debt facility of at least $1 billion, prompting the question of why such a financially successful business even needs the extra cash for the IPO. Regardless, the studio is in for some very exciting financial times over the next year – as pieces fall into place and stocks open to the public.
The founder and owner of Zynga Games, Marcus Pincus, is certainly not someone you would expect to be rushing in to make a deal with Wall Street. When he was a Harvard Business School Student, he repeatedly left interviews with several large firms because he felt their questions were misplaced, and in some cases, completely idiotic:
“Even if I’d wanted to work at Goldman Sachs, they weren’t going to hire me, because I was saying things like ‘That’s a dumb question’ when I was asked something stupid in the interviews.”
After many of his colleagues and friends landed hedge funds and signed on with major business, he had initially felt like a failure in life. Now the owner of one of the biggest developers in the world at the age of 45 – you can bet he doesn’t feel that way now.
What do you think about Zynga’s move to sell stocks to the public?