Report: $20 billion Zynga to go public within days
Social gaming giant Zynga is to take to the stock market in the coming days, valued at $20 billion, according to reports.
Bloomberg reports that Zynga could file for an initial public offering (IPO) as early as today, as it seeks to capitalise on the recent surge in interest in web businesses which has seen the likes of LinkedIn and Groupon file IPOs of their own in recent months.
The Wall Street Journal, meanwhile, claims that Zynga expects to raise some $2 billion dollars from the IPO, which would see it valued at $20 billion – which would make it the largest US videogame company by far, outstripping the combined value of Electronic Arts and Activision Bllizzard, the two biggest publishers in the world.
While many within the industry continue to view social games with some distrust, on Wall Street thinking is markedly different. Key to this is Zynga's profitability: while, as a private company, it does not publish its finances, a report in February claimed it had made a profit of $400 million in the previous financial year, from sales revenue of just $850 million.
At the time, Zynga had just embarked on a $250 million round of fundraising, which effectively valued the firm at between $7 billion and $9 billion. That valuation has more than doubled in a shade over four months, during which time Zynga has boosted its reach and profile with a slew of acquisitions and appointments.
In fact, it has made 14 acquisitions in the last 12 months alone, snapping up specialists in mobile games including Sapus Media, Drop7 developer Area/Code and Words With Friends studio Newtoy. It has taken steps into other media, with the appointment to its board of directors of Dreamworks CEO Jeffrey Katzenberg and two partnerships with Lady Gaga.
It has boosted its profile in traditional gaming circles as well, hiring the likes of ex-EA and Xbox executive John Schappert, Sony Online Entertainment's John Blakely, former Tecmo Koei president Kenji Matsubara and Westwood Studios co-founder Louis Castle.
Its San Francisco headquarters aside, Zynga has five offices in the United States, as well as a presence in India, China, Japan and, since the April acquisition of Wonderland Software, the UK. Allied to this rapid expansion is a huge userbase – according to AppData, Zynga currently has over 270 million monthly active users of its Facebook games.
It should be noted, however, that reports of Zynga's readiness to float on the stock market have been wide of the mark before: late last month All Things Digital was told Zynga was to file its IPO within ten days. Judging by the staggering rate at which Zynga's valuation is rising, it may yet deem it prudent to wait a little longer.
Source: Bloomberg / Wall Street Journal