29 June 2011 - 4:10pm | posted by | 0 comments

Zynga plays it cool as it launches a new California gold rush with IPO

Zynga plays it cool as it launches a new California gold rush with  IPOZynga plays it cool as it launches a new California gold rush with

Is it a train? Is it a plane? Is it a bubble? The news today is that FarmVille company Zynga is set to launch an IPO which could value the company at $20 billion - double the estimates of only a few weeks ago

Zynga's filing with the Securities and Exchange Commission on Friday follows others recently from firms, including Pandora,  LinkedIn, Yandex and Demand Media .  Their high  prices reminded many  of the 1990s technology bubble.

The most recent example was Internet radio company Pandora,  priced at $16 on June 14.  It  fell to $12.94 by June 17 on concerns over its profit prospects. Its shares have since come back  and were at $20.66 today.

Zynga, in its filings, did not disclose a share price, the number of shares it will offer for sale or when it expects to begin offering its stock.

"Bankers are very aware of the Pandora fiasco and would not like to see a repeat of that," said Nitsan Hargil, senior analyst with GreenCrest Capital Management.  "They are likely to price Zynga much more conservatively."

However, he pointed out ,"This is the first one we're seeing where the company has very massive revenue."

Zynga's cash comes from selling virtual goods that can be used in the games. In March it was reported that the company, which has 1300 employees, expected to earn $630 million on $1.8 billion in revenue this year.

Zynga's top games on Facebook are FarmVille and CityVille. About 215 million people play its games monthly but FarmVille players are now in decline.  At the beginning of the month Zynga launched Empires & Allies, described as an online version of a toy soldier set, in which people actually perish.

Don't miss out... Get your Advertising news by email

See all specialist newsletters

24 related companies from Profile Hub, The Drum's modern marketing directory:

Be the first to comment on this article: sign in or register.

Latest Projects from the Profile Hub

BWP gets colourful with K3

18/09/2014
K3 approached BWP Group to help them design and build a...

dlc - Responsive website

17/09/2014
dlc is the UK’s leading, independent debt recovery firm,...

Ecommerce Solution for B2B and B2C Retailer

16/09/2014
Talking Tables provides high quality party decorations for...

Peak Scientific Innovation - Brand Communications for US Market

16/09/2014
Peak Scientific is a leading Scottish gas generator...

Messages in the Deep

16/09/2014
“Messages in the Deep” tells the remarkable tale of the...