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Zynga stock falters, holds on first day of trading
Zynga stock finally roared out of the gate and on to the trading floor yesterday at $10 a share, but investors weren't hugely impressed with the social gaming company. The stock started up a dollar at $11, and then dropped back down two, and then thirty, and then fifty cents during the day, leveling off at $9.50, which Forbes says was thanks mostly to "a stabilizing bid by Zynga's underwriters," which means Zynga's investors stepped in and bought up enough stock to keep the price up. So what happened? Shortly put, Zynga's stock wasn't really worth what it was priced out at. An initial public offering is designed to be priced a little low, in order to drum up demand for a company's stock from the public (not to mention raise some money). But Zynga went high and, as a result, didn't quite get the graph it wanted today. They didn't sell the FarmVille, so to speak -- ZNGA will likely be trading fine on Monday (and $9.50 is fine for the highly competitive gaming industry; THQ is sitting down at 75 cents right now). But Zynga's hype phase appears to be over. Now the company needs to prove it can sell more than just cow clickers.
Zynga's IPO road show begins, expects to raise $1 billion
Zynga is doing extremely well, especially for a company that started by piggybacking on a social-networking site, Facebook, and making games about farming. Zynga is in the process of launching its IPO, and while it won't be worth as much as initially expected this summer -- dropping from an expected high of $20 billion to a current possible low of about $10 billion -- Zynga is positioned to be worth more than EA, currently valued at $7.7 billion, and to compete with Activision Blizzard, which is valued at $14 billion. Zynga plans to raise roughly $1 billion for its IPO and has begun a nine-day pitch process to convince investors that the company is truly worth it, with plans to sell shares for $8.50 to $10 each under the Nasdaq label, "ZNGA." Zynga's offerings would mark the largest for a U.S. Internet company since Google in 2004, but with Facebook expected to eclipse it in 2012. If you're an interested investor, surveyor or slideshow-lover, you can view Zynga's complete IPO presentation right here.
