Zynga seeks to raise up to $1.15B in IPO

Social gaming giant Zynga plans to raise as much as $1.15 billion in its initial public offering according to a filing with the Securities and Exchange Commission.

Zynga--the creator of blockbuster titles like behind FarmVille and Words with Friends--is looking to sell 100 million shares at $8.50 to $10.00 per share and will reserve 15 million additional shares for extra demand. Zynga is selling about 14 percent of its common stock; with 699.3 million shares outstanding, the firm could reach a valuation close to $7 billion, just behind game publisher Electronic Arts' $7.73 billion market capitalization.

"We intend to use the net proceeds to us from this offering for general corporate purposes, including working capital, game development, marketing activities and capital expenditures," Zynga said in the SEC filing. "We intend to use approximately $83.6 million of the net proceeds to satisfy tax withholding obligations related to the vesting of restricted stock units, or ZSUs, in connection with this offering. In addition, we may use a portion of the proceeds from this offering for acquisitions of or investments in complementary businesses, technologies or other assets."

Zynga first filed its IPO in July. At that time, the company reported 2010 revenues of $597.5 million, proceeds generated via in-app purchases and advertising support. The SEC filing states that social network Facebook accounted for 81 percent of its accounts receivable at the end of September.

In its original SEC filing, Zynga committed to growing its mobile presence. "We believe there is a large opportunity to extend our brand and games to mobile platforms such as Apple (NASDAQ:AAPL) iOS and Google (NASDAQ:GOOG) Android. We will continue to make our games accessible on a large number of mobile and other Internet-connected devices and invest in developing and acquiring mobile development talent, technologies and content. Our DAUs (daily active users) on mobile platforms grew more than ten-fold from November 2010 to June 2011."

For more:
- read this CNet article

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