Like many other online companies, Zynga ,the online game company is also planning to raise capital in an Initial Public Offering (IPO), reports sources close to the company. With this move the company is expecting a capital accumulation of $2 billion and it might file the papers for IPO as early as Wednesday, reveals the sources.
Zynga ,the company behind the popular games on Facebook like, Farmville and Mafia wars will seek a valuation between $15 billion to $20 billion in their initial Public Offering. Morgan Stanley is expected to lead underwriters on the IPO, with Goldman Sachs, Bank of America Merrill Lynch, Barclays and JPMorgan also expected to be among the underwriters, the source said.
Experts are expressing of great optimism on the new move of Zynga. It is mainly because the company is going on with a stable revenue status.
Nitsan Hargil, an analyst at GreenCrest Capital Management LLC, a research firm that analyzes private companies, estimates Zynga will have revenue of nearly $1.5 billion this year and be profitable. Mr. Hargil, whose firm isn’t involved in Zynga’s fundraising efforts, said he is more intrigued by Zynga’s potential for profits than other Web companies.
The IPO wave is spreading among social networking based companies in Silicon valley. LinkedIn Corp, China?s Renern and Groupon the online coupon site were the latest in the series. Today, LinkedIn is above its IPO price, but down from its highs, while Renren has lost nearly half of its value since its IPO. Groupon has filed IPO papers early this month only.