Zynga IPO Could Fetch More than $1 Billion

Paul Lilly

Zynga, the social gaming company that's made a fortune on casual titles like FarmVille and Mafia Wars, is looking to raise $1 billion or more with its stock price between $8.50 and $10 a share. The plan is to sell 100 million shares, with another 15 million earmarked just in case demand goes over the top, which it probably will considering the past success of social Web-based IPOs.

If Zynga is able to raise $1 billion, it will qualify as the largest IPO since a little company called Google went public. And believe it or not, Zynga originally intended an even bigger IPO, but set its sights lower after watching other Web-based companies like Groupon and Pandora lose value after an initial gold rush, Bloomberg reports .

So, what will Zynga do with all this money?

"We intend to use the net proceeds to us from this offering for general corporate purposes, including working capital, game development, marketing activities and capital expenditures," Zynga wrote in its SEC filing. "We intend to use approximately $83.6 million of the net proceeds to satisfy tax withholding obligations related to the vesting of restricted stock units, or ZSUs, in connection with this offering. In addition, we may use a portion of the proceeds from this offering for acquisitions of or investments in complementary businesses, technologies or other assets."

Zynga also plans to give "a portion to charitable causes through its Zynga.org arm, but didn't state exactly how much.

Zynga current has about 6.7 million paying customers, an increase of 5.1 million from the same period one year ago. It also managed to double its revenue to $828.9 million this year.

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