Social games maker Zynga has raised $1bn in its initial public offering, pricing the shares at the top of the marketed range.
The developer of games such as “CityVille,” “FarmVille” and “Mafia Wars” sold 100 million shares for $10 each, Zynga said in a statement. This would value the company at $7bn.
The firm intends to use the money generated for game development and marketing.
The company had offered the stock for $8.50 to $10 apiece. It will start trading today on the Nasdaq Stock Market under the symbol ZNGA.
It was estimated that the company would raise between $1.5 billion and $2 billion through its IPO but the recent stock market floatings of Groupon and LinkedIn have proved that a bumper IPO doesn’t necessarily mean continued bloated trading.
Zynga is ubiquitous across Facebook, with four of five top gaming titles and has also expanded to Google+ recently. It also provides gaming apps for Apple’s App Store and the Android Market.
Founded by Chief Executive Officer Mark Pincus in 2007, Zynga doubled sales to $829 million in the first nine months of 2011. The IPO values Zynga at as much as $7 billion, or 6.8 times revenue in the year through Sept. 30. That’s more than three times rival Electronic Arts Inc.’s price relative to sales over the same period.
Electronic Arts, based in Redwood City, California, bolstered its own online services by purchasing PopCap Games this year. EA, the maker of “The Sims” and “Scrabble” for mobile devices had a market value of $6.9 billion, or about 1.8 times trailing 12-month sales.
Facebook is the next big web company to hit the stock exchanges. It is expected to float sometime between April and June next year and there’s talk of a $10 billion IPO, valuing the social network at more than $100 billion.
