The series of IPOs of Internet companies continues - this time the largest developer and publisher of games for the social network Facebook gathered on the exchange, Zynga company
Zynga is going to file an IPO in the very near future. The placement is organized by Morgan Stanley, Bank of America Merrill Lynch, Barclays, Goldman Sachs and JPMorgan, reported the newspaper The Financial Times. Various sources claim, that the company plans to sell no more 10% shares in the amount of 1 to 2 billion dollars. The valuation of the entire company also differs - from 10 to 20 billion dollars.
Zynga is a developer and publisher of social games for the social network Facebok. Among her most popular projects is FarmVille, Mafia Wars и CitiVille. The monthly audience of all Zynga games exceeds 215 million people. The company's annual income is estimated at over $ 1 billion.
The company earns mainly from the sale of "virtual values" - game weapons, ammunition, etc.. P. Unlike many other internet companies, Zynga is profitable and its revenues are growing - already this year the company can earn up to 1,5 billion dollars, foreign analysts say.
According to the analyst of Troika Dialog Investment Company Anna Lepetukhina, investors are likely to show significant interest in Zynga shares. “The success of Zynga's future IPO will depend largely on the offering price. Undoubtedly, the company's business demonstrates impressive dynamics, and unlike social networks, Zynga has a proven and effective business model. But one cannot ignore the risks., to which she is subject ", - she points out.
According to Lepetukhina, Zynga's fair value is approximately 6,6 billion dollars per company. "However, Considering, that in the course of recent transactions, the company's valuation was about 10 billion, the organizers of the future placement will target investors precisely on this amount ", - analyst predicts.
Now, according to Lepetukhina, the company's business is subject to two main risks. The first is the short life cycle of social games.. Besides, barriers to entry into this market are low and smaller competitors quickly copy the most effective ideas. Second risk - over-linking to Facebook. Despite, that the company works with other social networks, most of the revenue is still generated by games, posted on Facebook. However, this proportion will remain in the medium term - an alternative, comparable in scope, social network just doesn't exist. At least, till.
The future placement of Zynga securities may have a positive effect on the quotes of the Russian Mail.Ru Group. “Now the Internet holding owns about 1,4% game maker papers. Amid growing interest in the social commerce sector, Zynga's public offering, for sure, will be quite successful, which will lead to a positive revaluation of the share of Mail.Ru Group in the company's capital ", - explains analyst at TKB Capital Kirill Bakhtin.
Zynga was founded in July 2007 years in San Francisco. A year later, the developer of social games received in the form of venture capital investments 29 million dollars. IN 2009 year 1,4% Zynga shares were acquired by the Russian fund Digital Sky Technologies (DST, now Mail.ru Group), owned by Yuri Milner and Alisher Usmanov. The fund has invested in the development of Zynga 180 million dollars. In addition to the social network Facebook, Zynga works with Internet company Yahoo!
Recall, Chinese social network RenRen has successfully listed shares in recent months, Russian search engine Yandex, Pandora internet radio and LinkedIn social network for professional contacts. Groupon recently applied for an IPO.
Zynga's Internet IPOs Continue This Year. According to Reuters, Zynga's competitors are also preparing for the initial placement - PopCap Games, which also makes social games for Facebook. This company is going to go public in the fall.. And the most anticipated next year is the IPO of the social network Facebook.. Its Russian counterpart, the VKontakte social network, also reflects on Nasdaq.
