June 29, 2011

Zynga Planning To File IPO Wednesday

Online social game company Zynga plans to raise $1.5 billion to $2 billion in an initial public offering (IPO) and could file paperwork with U.S. regulators as soon as Wednesday, reports Reuters.

Zynga's website claims the company has over 215 million monthly active users.

It is the top games publisher on Facebook and rakes in revenue mostly from selling virtual items like tractors and weapons in games users can play on Facebook.

According to the report, Zynga's IPO would be the latest in a string of social media companies to take advantage of rebounding equity markets.

A source familiar with the situation told Reuters that Zynga is expected to float only a small portion of its shares and the IPO could value the company as high as $15 billion to $20 billion.

Reuters reported that Morgan Stanley is expected to lead underwriters on the IPO, with Goldman Sachs, Bank of America Merrill Lynch, Barclays and JPMorgan also expected to be among the underwriters.

According to CNBC, the credit facility is expected to be at least $1 billion.

Reuters also reported that competitors of Zynga are gearing up to file IPOs of their own.  PopCap Games, which also makes Facebook games, told Reuters earlier this year it was preparing to file by the end of the summer.

The report said some investors are already expecting Zynga's IPO to surpass LinkedIn's because of its steady revenue stream. 

Investors are also patiently waiting for Facebook, the world's largest social network, to start offering an IPO.


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