Words with Billions? Online Social Media Company Zynga to File for IPO
Online social media company Zynga, popular for its interactive games like Words with Friends and FarmVille, is looking to raise between $1.5 billion and $2 billion in an initial public offering, a source familiar with the matter said.
An IPO filing could be submitted to the SEC as soon as Wednesday, the source told Reuters.
Millions of people use the games that Zynga produces every day. Users can play games through Facebook, their mobile devices, Yahoo! (NASDAQ: YHOO), or MySpace.
FarmVille, MafiaWars, Words with Friends, and Poker are among the most popular titles created by Zynga.
Morgan Stanley (NYSE: MS) is expected to lead the IPO underwriting, with Goldman Sachs (NYSE: GS), Bank of America Merrill Lynch (NYSE: BAC), Barclays (NYSE: BCS) and JPMorgan Chase (NYSE: JPM) filling out the syndicate.
Zynga is only expected to float a small percentage of its shares, similar to LinkedIn's (NYSE: LNKD) recent IPO. Zynga could be valued as high as $15 billion to $20 billion, the source said.
Zynga's possible move to public trade follows a recent trend of hot technology companies garnering high market values. Facebook, Twitter, and Groupon, among others, have exceeded expectations in value as determined by the secondary market. Zynga could be looking to take advantage of the momentum.
According to the Reuters report, "A few months ago, Zynga's annual revenue was estimated to be about $1 billion, according to Sterne Agee analyst Arvind Bhatia who has said that the number could be higher now. This estimate would be higher than LinkedIn's annual revenue."
Zynga is based in San Francisco, California. As of this month, the company's games were played by more than 270 million monthly active users on Facebook.
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