By Eric Eldon
Social game developer Zynga (ZYNG) will start talking to potential public investors this Monday ahead of a mid-December IPO, according to reports earlier this week. The question is: how much will it be selling its stock for? That information has been expected to surface in an amended filing on Monday, but Reuters has some early details, that we’ve confirmed with a source close to the company.
Zynga is seeking to raise around $900 million by selling 10% of its stock at a range between $8 and $10 per share, for a valuation of around $10 billion, according to the report. Speculation had previously been that it would go for between $15 billion and $20 billion, and a third-party valuation analysis that Zynga had provided in a recent filing amendment indicated it was worth $14.05 billion.
Our source says Reuter’s range is correct, and attributes the decrease to Zynga’s concerns over larger economic issues, like any fallout out from Europe’s financial crisis, and the poor reception that other tech IPOs have had recently. The example everyone’s looking at is deals site group Groupon, which went public at $17.8 billion, but has dropped towards $10 billion recently (although it’s been climbing back up in the last couple days).
The lower price, of course, could also be aimed at addressing specific investor concerns about Zynga, the company — like declines in its Facebook traffic numbers, and reports about its intense company culture.
Zynga’s bankers, some of whom apparently didn’t wait for the roadshow to begin talking to the press, could also still adjust the amount it seeks to above $900 million. The company had said it was looking to raise $1 billion when it had first filed in June.
After Zynga’s wild ride to success over the past several years, the conservative pricing could also help set a new tone for it on the public stage.
[Image via BetaBeat.]