Friday, December 2,2011 : SOCIAL ONLINE POKER COMPANY HEADING FOR I.P.O.
Analysts watching Zynga's moves closely
The San Francisco-based social gaming giant Zynga, which runs a massive social poker operation through Facebook, is expected to file its final initial public offering prospectus today (Friday), paving the way for a stock offering by mid-December, the newspaper USA Today reports.
The company intends to start an IPO roadshow on Monday in New York, an unnamed source said, revealing that the IPO is expected to debut at $8 to $10 per share, and raise $900 million on a $10 billion valuation.
Zynga declined to comment when contacted by the newspaper.
With 227 million monthly users – 35 million of them playing Zynga Poker every month – Zynga is a major social gaming success story. Through September, it notched $829 million in revenue, twice as much as in the same period a year earlier. The company has earned $121 million since the start of 2010, according to stock exchange filings.
Analysts will be watching the IPO closely, regarding it as a litmus test for the techie IPO market, and an indicator to how a public listing by Facebook might be received.
Facebook is expected to file for an IPO in April 2012, when it is required to disclose financials, now that it has reached 500 shareholders. A public offering could reach a valuation of up to $100 billion and raise $10 billion, analysts estimate. Facebook's revenue will climb to $4.3 billion this year, double the $2 billion it rang up in 2010, estimates market researcher eMarketer.
Advertising will comprise a huge chunk — $3.8 billion — as it did in 2010, when Facebook registered $1.86 billion in advertising revenue.
By 2013, Facebook is expected to earn $7 billion in advertising revenue, according to eMarketer.
There has also been speculation recently that Facebook is about to move into online gambling in regulated markets.
Zynga is making moves to wean itself off Facebook as a platform where most of its customers play its games. In October, Zynga discussed plans for its own platform, code-named Project Z, but the company has a deal with Facebook that runs through 2015.