Zynga officially goes public

Today saw the initial public offering, or IPO, of Zynga Inc., the largest maker of Facebook games, raising $1 billion on its first day of trading.

The shares, listed on the NASDAQ stock market under the symbol ZNGA, launched at $10.00 USD per share, but gained only one cent around 11:36 a.m. EST, and helped it to a higher valuation than even Electronic Arts. It’s the biggest offering by an American Internet-based company than even Google’s $1.9 billion IPO in 2004, according to Bloomberg Magazine.

Early investors have been enthusiastic about the IPO, grabbing shares closer to the high end of the expected range, analysts continue to express concern about the company’s future. Primarily, the game publisher’s heavy reliance on Facebook for its primary revenue streams, and whether its growth will be able to continue to justify its valuation.

Cowen and Co. analyst Doug Creutz noted that Zynga’s expenses have “exploded” in the past year, while its growth has slowed dramatically by comparison. He also noted that the company’s daily active users count on Facebook has slowed “dramatically,” and it’s overall share of users has dropped from 50 percent to around 38 percent during the last year as well.

Earlier in the week, analyst group Sterne Agee concurred with the Cowen report, giving Zynga an “underperform” rating, citing that “Zynga’s growth is slowing even faster than what is obvious at first.”

Indeed, as of this printing Zynga stock has already plunged 6% to rest at $9.40 a share.

[source] Gamasutra

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Comments:

Marlin says:

12-16-2011 04:55 PM

stock is already down what a terrible company
Maverick says:

12-16-2011 05:03 PM

Well it's more that they planned to make a huge splash, but fizzled relative to expectations. Shares went as low as a dollar per share below the launch price, but closed down 50 cents per share - while not a bloodbath it's not what you like to see in an IPO.
Marlin says:

12-16-2011 06:18 PM

Originally Posted by Maverick

Well it's more that they planned to make a huge splash, but fizzled relative to expectations. Shares went as low as a dollar per share below the launch price, but closed down 50 cents per share - while not a bloodbath it's not what you like to see in an IPO.

My comment about the stock being down and them being a horrible company were mostly unrelated. They could have had the most successful IPO in history and they'd still be a horrible company. They're going to crash and burn within five years when they push their business model too far. Their Facebook games pretty much rely on a few addicts socially obligating their friends to interact with the game, and slowly but surely more people are getting fed up with Zynga's shit. As those people start blocking game requests on FB and telling their addict friends to piss off, Zynga is almost surely going to compensate by trying to get more out of who's left.

Hell I know that one of the huge draws already with Google + for a lot of people is that you don't have to deal with any of this shit, because Google set up their social gaming mechanics in an entirely different way, knowing just how much this Farmville shit pisses most people off.
faits says:

12-16-2011 06:54 PM

no zynga's going to have their own social network it's going to be rad
Marlin says:

12-16-2011 07:28 PM

Originally Posted by faits

no zynga's going to have their own social network it's going to be rad

I wish they did have their own social network and I wish it was rad so that all the braindead people who get off on clicking shit once every 20 minutes will have their own place to go and leave the rest of us alone.