Zynga Falls 5% in NASDAQ Debut

Leading social game developer Zynga

fell 5% on its first day of trading on the NASDAQ exchange. The maker of popular games such as "CityVille," "FarmVille"and "Mafia Wars," completed a $1 billion offering of shares at $10 apiece giving Zynga a valuation of around $7 billion. The deal priced at the high end of its expected range. Zynga was founded in 2007 by current Chief Executive Officer Mark Pincus. The IPO popped initially, opening at $11.00, but immediately began falling and ended Friday's trading session at $9.50. In the third quarter, Zynga reported revenue of $306.8 million which represented an 80 percent increase from last year's third quarter. Zynga generates over 90 percent of its revenue from Facebook and is facing strong competition from competitors such as Electronic Arts

. Nevertheless, many investors are intrigued by the company's unique business model and potential for future growth. Pincus, who did not sell any shares in the IPO, said that “We're bigger believers in the future of play and social gaming than any other company and we wanted to be in a position that we had the resources to invest more in that future than any other company." The company plans to use the proceeds of its public offering for game development, marketing, and general corporate expenses, according to its filing. Zynga's IPO is the largest of any U.S. internet company since Google

raised $1.9 billion in 2004. Selling shareholders included investors Kleiner Perkins, IVP, Union Square Ventures, Foundry, DST, Avalon, Google, SilverLake, Tiger Global and others.