Zynga evaluated at $9.04 billion

Posted by Theresa Milano On Friday, December 2nd 2011 in Finance

Zynga Inc is trying to receive a more modest evaluation on Wall Street for its first public offering. Considering the fact that several Internet stocks fell under their IPO price in recent weeks, Zynga is trying to attract investors.

The maker of social games such as "FarmVille" and "Mafia Wars”, wishes to sell 100 million new shares with prices ranging from $8.50 to $10 each. If this comes to pass then the company will be able to raise $925 million.

At the moment Zynga is evaluated at $9.04 billion, which is almost two times less than the $14.05 billion valuation the company cited approximately two weeks ago.

"Given what's transpired in the markets over the several months and overall macro uncertainty, it seems like Zynga is trying to take a practical and prudent approach to the deal to make it seem more appetizing to investors," said Robert W. Baird & Co analyst Colin Sebastian.

Lately the shares of companies such as Groupon Inc and Pandora Media Inc fell under the IPO price. This is an unfortunate event for other Web start-ups that wish to get launched on the public market.

At $925 million, Zynga's IPO is considered the largest since Google Inc managed to raise $1.7 billion in 2004.

Zynga announced it would be selling 11.1 percent of diluted shares in its offering. Analysts however, pointed out that Facebook’s growth is slowing and impacting Zynga as it goes.

"The exponential growth with Facebook gaming we saw in the last two years is not going to happen and is definitely slowing," said Interpret analyst Michael Cai.