Zynga Continues IPO Push (ZNGA)

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Zynga Inc. is still planning to come public in an initial public offering.  The online and social gaming company has been making strides of late to distance its dependence solely on Facebook and the most recent filing shows more details of its business. 

The first filing over the summer was for up to $1 billion and the most recent filing does not clarify the financial terms of the offering.  The company is maintaining a three class structure for its shares and this looks like it will be another low float IPO.

The underwriting syndicate is rather large with Morgan Stanley and Goldman Sachs as the book-runners.  Co-managers were listed as BofA/Merrill Lynch, Barclays Capital, J.P. Morgan, and Allen & Company.  Zynga will trade under the ticker “ZNGA” on NASDAQ.

The large majority of sales come from the games of “Ville” genre games, Mafia Wars, and Poker.   For the six months ended June 30, 2010 and 2011, revenue increased from $231.0 million to $522.0 million and bookings increased from $373.0 million to $561.3 million.  Unfortunately, the company’s net income fell during the first half of the year from $20.4 million to $18.1 million and its adjusted EBITDA fell from $187.3 million to $177.3 million.

Zynga has recently unveiled new games and a new gaming service and it is trying to get away from being so dependent upon Facebook for the integrated games.

The company noted in its filing, “We are the world’s leading social game developer with 232 million average monthly active users, or MAUs, in 166 countries. We have launched the most successful social games in the industry in each of the last three years and have generated over $1.25 billion in cumulative revenue and over $1.75 billion in cumulative bookings since our inception in 2007.”

JON C. OGG