But several challenges confront Zynga, including at least a temporary slowdown in bookings.
The social games developer said on Friday that it plans to sell 100 million Class A shares for $8.50 to $10 a piece, raising as much as $1 billion and valuing the company at about $9 billion including options and warrants.
Demand is certain to be huge considering the monumental growth Zynga has experienced since its founding in 2007. Revenue through the first nine months of the year was $829 million, more than double the $402 million for the same period last year.
While many investors know the Zynga growth story, they may not be aware of the San Francisco company’s plans to employ three classes of stock to concentrate voting power with founder and Chief Executive Mark Pincus.
They also may not be aware of exactly how much bookings and paid user growth have slow in the past several quarters. Zynga derives most of its revenue by selling virtual goods to a small percentage of its social games players, taking advantage of popular titles such as FarmVille, CityVille, FrontierVille and Mafia Wars.
In the following slideshow, we look at Zynga’s IPO from a variety of angles, drawing on data from the S-1 it filed with the Securities and Exchange Commission. We should note before we start that Zynga addresses most of the points mentioned above in the document.
For instance, it admits the three class stock structure limits shareholders’ ability to influence corporate decisions. It also ties the bookings slowdown to its failure to launch new games in the first half of 2011 in time to materially impact bookings.
And it adds that its failure to launch successful games on a regular basis could have a negative impact on bookings and ultimately revenue in future periods.
Here is the slideshow:
(Photo by Schmitz/Shutterstock)
[slide title=”The Offering”]
Zynga to sell 100 million shares of Class A common stock
Price: $8.50 to $10 a share
Over Allotment: 15 million shares
Percent Of Outstanding Shares Sold: 14.3%
Trading Date: Dec. 16
[slide title=”Zynga’s Game Stats”]
Active Daily Users: 54 million
Minutes Of Daily Play: 2 billion
Countries With Game Players: 175
Cumulative Revenue Since 2007 Founding: $1.5 billion
The Facebook Effect: Four of five top Facebook games as of September
[slide title=”Classes Of Common Stock”]
Class A: One vote per share
Class B: Seven votes per share (about 72.5% of votes)
Class C: Seventy votes per share (about 25.7% of votes)
[slide title=”Zynga Board Of Directors”]
[slide title=”Major Shareholders And Voting Control”]
[slide title=”Zynga Revenue Continues To Grow”]
[slide title=”Zynga Bookings Flatten”]
[slide title=”Zynga’s Paying Customer Growth Slows”]
[slide title=”Zynga’s Net Income Falls”]