Zynga’s IPO A Disappointment

Towards the end of the year, Zynga announced that it would be going public. Initially, the company was valuated at over $10 billion, as stocks were supposed to sell for $25 – $75 each. Unfortunately for Zynga, that was not the case, as the company made its debut to a lukewarm response from investors. 

Zynga is an online gaming giant. The brains behind popular games like Zynga Poker, Mafia Wars and Farmville, the company has worked hard to become an innovator in the social gaming market. Generating such impressive advertising profits and garnering a great deal of attention, the next natural step for Zynga seemed to be going public.

However, the company failed at drumming up enough hype for its initial public offering. Investors were left wondering why they should purchase stocks in Zynga, and the result was a dismal debut. 

The stocks ended up selling for less than half of their initial price: just $10. As such, Zynga is worth less than $7 billion on the stock market, $3 million less than the company was initially hoping for.

This seems to be a trend among online companies that go public. Linked In and Groupon experienced similar results with their IPOs at the beginning of 2011. 

 

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