INTERNET GAME developer Zynga, which plans to go public in two weeks, has slashed its value by more than 30 per cent to $9 billion, hoping to avoid the fate of other recent internet IPOs that have disappointed after stock market debuts.
The pricing values the maker of Facebook games as high as $9.04 billion, whereas just two weeks ago a filing listed its value, based on a third party assessment, at $14.05 billion.
“Given what’s transpired in the markets over the several months and overall macro uncertainly,” said Robert W Baird analyst Colin Sebastian, “it seems like Zynga is trying to take a practical and prudent approach to the deal to make it seem more appetising to investors.”
Shares of internet companies Groupon and Pandora Media, both high-profile IPOs, have slumped below their flotation prices. Some feared Zynga would find itself in a similar situation after some previous sky-high valuations.
Zynga said in an updated filing that it planned to sell 100 million new shares, an 11.1 per cent stake, at between $8.50 and $10 each.
A Zynga spokesman declined to comment. At the midpoint price, the Zynga IPO could raise $925 million, which would make it the largest by a US internet company since Google raised $1.7 billion in 2004.
The updated filing with a price range kicks off the company’s road show, in which chief executive Mark Pincus and chief financial officer David Wehner will pitch to potential investors.
Zynga aims to set a final price on December 15th and the stock is scheduled to trade on December 16th.
Zynga made its name with viral games such as FarmVille, among the most popular on the Facebook social network. – (Reuters)
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