Analyst: Games firm Zynga may raise $1b from float
Analyst: Games firm Zynga may raise $1b from float
11:02, November 24, 2009 
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Zynga Inc, maker of the Mafia Wars and FarmVille games played on Facebook, may be valued at $1 billion based on the sale price of a smaller rival.
Valuations for Zynga and its peers were established this month when Electronic Arts Inc bought Playfish Inc for three to four times its revenue, said Jesse Divnich, an analyst with researcher Electronic Entertainment Design & Research. Zynga may generate a value of $1 billion should the company be taken public, said Terry Schallich, head of capital markets at Pacific Crest Securities, a technology-focused investment bank.
"If the IPO were timed to price around mid-2010 or later, our expectation would be for a billion dollar or greater valuation," said Schallich, who is based in Portland, Oregon.
That could make San Francisco-based Zynga the third-largest US video-game publisher by market capitalization, bigger than Take-Two Interactive Software Inc, the maker of crime-game franchise Grand Theft Auto. New York-based Take-Two had 2008 sales of $1.54 billion and has a market value of $909 million.
Zynga will have revenue of $210 million this year and $355 million next year, according to Justin Smith, the founder of the industry-tracking website Inside Social Games.
The figures are based on estimates of Zynga's revenue per player across all its games and its number of daily active users, Smith said.
"It is a real business and has huge momentum," said Todd Greenwald, a games and Internet analyst at Signal Hill Capital Group LLC in Baltimore. "There would definitely be an appetite" for a Zynga initial public offering.
Source: China Daily
Valuations for Zynga and its peers were established this month when Electronic Arts Inc bought Playfish Inc for three to four times its revenue, said Jesse Divnich, an analyst with researcher Electronic Entertainment Design & Research. Zynga may generate a value of $1 billion should the company be taken public, said Terry Schallich, head of capital markets at Pacific Crest Securities, a technology-focused investment bank.
"If the IPO were timed to price around mid-2010 or later, our expectation would be for a billion dollar or greater valuation," said Schallich, who is based in Portland, Oregon.
That could make San Francisco-based Zynga the third-largest US video-game publisher by market capitalization, bigger than Take-Two Interactive Software Inc, the maker of crime-game franchise Grand Theft Auto. New York-based Take-Two had 2008 sales of $1.54 billion and has a market value of $909 million.
Zynga will have revenue of $210 million this year and $355 million next year, according to Justin Smith, the founder of the industry-tracking website Inside Social Games.
The figures are based on estimates of Zynga's revenue per player across all its games and its number of daily active users, Smith said.
"It is a real business and has huge momentum," said Todd Greenwald, a games and Internet analyst at Signal Hill Capital Group LLC in Baltimore. "There would definitely be an appetite" for a Zynga initial public offering.
Source: China Daily
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