***ZYNGA IPO UPDATE***
The Zynga IPO, as many of you already know, is already being talked about by some, as the most sought after IPO in the last few years. On a pure interest basis, comparisons are to be Google (GOOG:NYSE) are already being made. Especially with the recent demand for other tech related IPO’s.
As some of our followers know, we make an effort to highlight some high profile public offerings, and we give color on other lesser known investment banking deals as well, but the Zynga IPO is different, much different from other deals.
Recently, some of you have watched tech IPO’s like the LinkedIn IPO (LNKD:NASDAQ) and thePandora IPO (P:NYSE) have huge pops, but only fall back after institutions and IPO flippers came out of their allocations. The reason for the declines of the two stocks mentioned above is pretty simple. Their fundamentals don’t match the market caps for the short term. Short sellers know that even a booster shot buy recommendation from a brokerage firm can only do so much for a stock price. This is why many hedge funds short these deals when borrows become available.
Zynga’s IPO is unique though. Look at a company like Pandora, even the CEO can’t tell you when they are going to be profitable. With Zynga, it’s obviously different. Their presence on Facebook is huge and still growing. The revenues are also off the charts already and it’s not unreasonable for some to say that Zynga could eclipse the$1 billion mark in revs in the next couple of years.
Zynga’s user base is also extremely loyal even in the competitive gaming space. Games like Farmville, Cityville and Frontierville keep users coming back. Zynga’s solid brand and management also has something to do with the present valuation talk being in the $20 billion range. Keep in mind that most experts felt Zynga was valued in the $10 billion range at the time of our initial Zynga IPO profile entry.
So get ready for the hype to begin as the deal is rumored to trade in the fall. Even though Zynga’s IPO offering will be larger than some of it’s recent tech predecessors, shares will be extremely limited for retail accounts. In other words, for a deal of it’s size, Zynga will be oversubscribed to epic proportions. So please don’t be disappointed or mad at your broker if you are shutout.
Original ZYNGA IPO post below:
Zynga IPO Gonna be Hot
San Francisco based social networking game developer Zynga is rumored to file for an IPO in the very near future.I has almost 250 million Facebook users and 4 of its most popular games are City Ville, FarmVille, FrontierVille and Zynga Poker. On Tuesday, Zynga just released it’s new game Empire and Allies. A move that some feel is geared towards creating even more interest in Zynga’s IPO stock offering.
In the past few months we have seen a slew of red hot IPO’s come to market, especially in the social networking space. LinkedIn IPO (LNKD:NASDAQ) was the latest, and despite the fact some are calling for a bubble in the space, it’s probably safe to say that the Zynga IPO will be heavily oversubscribed. Zynga already has roughly 250 million active Facebook users who frequent their games. The company has also been recently valued in the $10 billion range, and is rumored to have Morgan Stanley and Goldman Sachs in the running to be the lead underwriters.
Zynga Already has Profit which should help the Zynga IPO
The difference from Zynga IPO and some other the past social networking IPO’s is that Zynga already did $850 in revenue last year. The number is simply mind boggling. As we have said in the past getting shares of such a hot deal will be next to impossible on a retail basis, and that’s considering that Zynga’s IPO offering size could be considerably larger than many of the more recnt IPO’s in the space. So the best way to play it may be buying other gaming companies in anticipation of the offering. The hype from this deal could potentially move several stocks that range from mid caps all the way down to penny stocks.
So stay tuned, we will try to highlight a few different names and point out others on our stocks to watch list.
Check back for more penny stock news, IPO updates and stock market research.