CNBC is reporting that Zynga could file paperwork for an initial public offering of stock this week. The social media powerhouse hopes to raise as much as $2 billion from the IPO. Morgan Stanley will lead the deal.
According to the article, some industry estimates place Zynga’s value at between $15-20 million after the stock offering is done. That would make it even more valuable than Activision Blizzard, with an estimated value of $13 billion.
Zynga is one of the crown jewels in the explosion of social media stock offerings. LinkedIn and Groupon have already filed IPOs and rumors have Facebook and Twitter joining the fray soon enough
Games aren’t just games when they have 250 million regular users, some of whom spend real money on in-game items. Zynga has turned millions of people outside traditional gamer demographics into players with addictive hits such as FarmVille, CityVille and Mafia Wars. Millions more gamers mean a lot of advertisers wanting to get their eyeballs locked on some products.
These valuations are always subject to debate, as they deal with speculation and talk of future earnings. By virtually any measuring stick you use, Zynga’s growth has been incredible. The company started business in 2007 and is poised to become the largest company in video games. That will put Zynga on a perch higher than companies that have been in the business for decades. According to the Wall Street Journal, Zynga made an estimated $850 million in 2010.