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Zynga Seeks $1 Billion In IPO
bizwriter writes "Zynga finally filed its IPO paperwork today, as it wants to raise $1 billion. And while the reports of how well it did were significantly overstated, this is a company that still makes significant revenue and profit. If you thought that LinkedIn's IPO was hyped and hyper, Zynga's going to put that all to shame."
If you thought that LinkedIn's IPO was hyped and hyper, Zynga's going to put that all to shame.
Okay so let's take a look at the two IPOs. From Slashdot's own summary of LinkedIn's IPO we have this fact about what the shares were trading at on LinkedIn's opening day:
That price values the company at over 30 times its 2010 revenue ...
So now that we can see Zynga's financials, we see that its revenues for 2010 were $600 million meaning that if the shares hold at exactly the price Zynga opens at, they will be valuing Zynga at 1 2/3 times their 2010 revenues. Now, of course, last year's revenue doesn't mean everything as growth, market cap, etc come into play. But that 1 2/3 times is substantially less than the ridiculous 39x amount that LinkedIn's IPO skyrocketed to. If the total trading volume's valuation goes from $1 billion to $23.4 billion in the first day of trading then we'd be approaching LinkedIn-levels of bubble hype. How exactly is Zynga going to "put that all to shame"? Are you in possession of some proof that the trading will once again go ape shit past $23.4 billion? I think the recent MySpace sale has shown that a company that makes games (though shaky) is nowhere near as volatiles as a company that relies upon its social network to fill its coffers.
Remember, some folks estimate that Farmville alone is now worth more than EA.
I hate Zynga with a passion and am convinced that Words with Friends has completely destroyed my Android phone's battery life (all the while showing me ads to improve my battery life) but I think they're a far better bet than LinkedIn. I've commented on Zynga's 7 Eleven partnership long ago and I think that market penetration is massive and gives them an upper hand that I cannot fathom how the competition will beat -- especially if that's an exclusive contract.
My work here is dung.
Or, would it be BaZynga?
Didn't we learn our lesson the last time? Are we really going to go down this road again?
Palm trees and 8
as fast as humanly possible.
Good-bye
It doesn't really matter what the company's value is. Stock price is completely and totally unconnected to any kind of company value or profit. Stock price is purely a measure of how much people are willing to pay for a "share" of a company. It used to be that people bought stock because they pay dividends, but now few stocks pay any dividend, and people are simply gambling that one day in the future people will pay more for the "share" than they are willing to pay now. All of the analysis into a stock's "value" are about as useful as "analyzing" numbers on a roulette wheel.
I don't respond to AC's.
All aboard! The gravy train is leaving this station.
This is another bubble, which is being inflated now, and since people have short memories and no understanding of economics they are jumping right on it.
These new software service/product companies are going IPO now, while things are still moving. Wall Street wants to push these companies right now, one after the other, feeding the frenzy, as they know it won't last.
These insane valuations that Linked In and all these other new IPOs are going at are forward looking, they are assuming 100% profitability at current level. They have no space to go but DOWN.
Don't believe the hype.
You can't handle the truth.
I've go at least 30 Billion in New York alone on Mafia Wars.
"A person is smart. People are dumb, panicky dangerous animals and you know it." - K
Looks like it's about time for FuckedCompany to make its return.
http://games.slashdot.org/story/11/07/01/0533250/Current-Social-Games-Arent-Fun-Says-MUD-Co-Creator
As a survivor of the first bubble, followed by the SoCal Real Estate bubble, all I can say is that my BS detector is making loud whooping noises. A company is worth a a reasonable multiple of its earnings; nothing more. And reasonable doesn't mean 650x.
"Man is nothing without the works of man" -- Helvetius
Last time was like 12 years ago dude, it's retro now.
There's no -1 for "I don't get it."
In a day and age when a world famous camera label goes for a mere $125 million and a Zynga goes for a Billion, something is wrong.
It's approximately the agricultural GDP of Rhode Island.
IPOville - Help your friends over value another useless company, click on this link...
A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effort.
That is all that they are worth!
I've never heard of it.
Of course I completely avoid all the other ridiculous crap everyone else seems to love, like facespace, jitter and LinkedIt.
"Farmville developer Zynga finally filed its IPO paperwork today, as it wants to raise $1 billion..."
There, now everybody who isn't familiar knows wtf Zynga is, and can hopefully avoid wasting their time on this blurb, which was so thorough there was no room for even a Wiki link.
I don't know why I am expecting any standards of halfway decent journalism at Slashdot, but I am nonetheless, so hear my bitching.
I just found the box to change my sig. Um.... [timeless witticism].
What bubble?
giggity
Morgan Stanley -
rescued at the last minute by a japanese bank. was a hairs breadth from becoming another Lehman level bankruptcy
BoA Merrill -
a shotgun wedding, after Merrill drove itself over the CDO cliff by firing the risk managers for a few short years of record profits. they fire the CEO, then hire a new CEO who does a million-dollar refit of his office, then dithers around a whole year before doing the exact same thing the fired CEO wanted to do - sell the company to Bank of America (except this time at something like 1/4 the price).
Goldman Sachs -
Not alone, but a very prominent company that sold bad products to some customers, so that other customers could place bets (credit default swaps) that the products you just sold to the first customers would lose their value. also involved in the Food bubble through Goldman Sachs Commodity Index Fund. also spawned people like Robert Rubin & others who helped stop Brooksley Born from regulating CDS and CDOs back in the late 90s when she tried to.
Barclays -
CDO business.
JPM -
We just found out recently they were behaving almost exactly like Goldman Sachs in some of their CDO dealings - the hedge fund was not John Paulson though, it was Magnetar Capital.
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These are the people 'bookrunning' this Zynga IPO. These are the people who will take millions of dollars that investors have put into this IPO, and they will take those millions as profit for 'arranging the deal'. These are the people who will carve off special chunks of the IPO stock and dole it out as pseudo-political favors to various hedge fund managers ( i recommend Trading with the Enemy and Running Money for details about how this works).
This is what this new 'industry' is made of. These are the people in charge. These are the men behind the curtain, turning the gears of the media so that big stories about the big success of big innovative companies will drive buzz and suckers to come to the circus and pay their three bucks on a horse in the sideshow.
This is what our 'economy' has become.
as the book EConned by Yves Smith and the film Inside Job by Ferguson have demonstrated, the 'study of ecnomics' is somewhat corrupt and lacking in the rigor that one might find, say, in the field of, say, art history.
i.e. you cannot write an article about an 11th century cathedral and claim that it proves that christianity is the best religion. but that is the sort of thing going on all the time in economics journals.
why? the professors are payed off by business interests to push this crap, so that politicians and other business people will buy into scams. Inside job has the perfect example: payed-for 'academic' studies of the Icelandic banks written to convince policy makers in Iceland and elsewhere to accept the 'revolution' of privatization circa the turn of the 21st century. result - iceland was technically bankrupty and the UK used anti-terrorism laws to seize icelandic property.
it is not just that the average person is stupid.
its that the average person is being lied to by a well funded, well oiled PR machine, masquerading as a science.
also all had excellent credit ratings and good numbers.
right before they didn't.
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look at who is bookrunning the zynga deal. the same companies who bookran the CDO business. the same companies who bookran the subprime mortgage business.
its probably even the same people inside those same companies. the CDO market dried up - move those people to the IPO business! it worked in 2000, by 2011 everyone will have forgotten and a whole new wave of suckers is born.
great point about 'projected profits'. it is exactly the same sort of thing that JP Morgan, Goldman, Merrill / BoA, and Morgan Stanley pulled in the CDO business....
those are the same companies bookrunning this IPO.
So who is going to be the biggest cash-grab fraud this year? Groupon or Zynga? Let me know when you're holding the empty bag and we'll party like it's 1999.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
That is... What I mean to say is that the Government can and does shut down domains; Sometimes without much research into the repercussions. They usually plaster up a big scary splash page "Child Pornography and/or Copyright violation is Illegal. Your IP is now logged. Criminals will be prosecuted within the full extent of the law." that ensures no visitors will be coming back if they see it.
Perhaps I'm concerned over nothing; Maybe there's a commercial advisory body that's knowledgeable about the web and oversees the take-downs to ensure no big guys accidentally get snared...
I wish I could mod you up because you are exactly correct. There are about 10-20 people who control most of the massive shifts in the stock market and they are hedge fund and mutual fund managers. They can absolutely destroy companies because of the amount of money and investors they represent and control. The average Joe off the street doesn't stand a chance against these guys. Your best bet is to try and ride their coat tails and hope you don't get thrown off and end up on the floor broke. Not to mention that the public doesn't invest on numbers they invest based on what they feel and think of a company and what they hope and pray someone else will pay for the shares in the future given so few companies actually give out dividends. It's mass psychology at it's finest.
If you believe their is reasonable oversight for seizing domains, I have ocean front property in Nevada I want to sell you. The big guys won't get caught in the drag net because they have lobbyists who are paid to pay off...excuse me give political contributions to the people in Washington who matter.