Social game developer Zynga Inc plans to raise $1 billion through an initial public offering (IPO), which would value it at around $7 billion, Bloomberg yesterday reported, citing a person with knowledge of the matter.
The publisher of online game Farmville on Facebook, will sell about 15 per cent of its common stock in the IPO at $8.50 to $10 apiece.
Zynga decided against a small-sized public issue for its stock after companies such as Groupon and Pandora Media tumbled following their IPOs. While selling fewer than 10 per cent of their shares helped those companies boost early demand for their offerings, the stocks have more recently dropped below their initial prices, the news agency said.
Zynga's listing would make it the first publicly-traded company whose profits depend solely on the sale of virtual goods.
The San Francisco-based startup with popular games for Facebook including "CityVille," "FarmVille" and "Empires & Allies", sells virtual items for its revenues. These include pink tractors for "FarmVille," or an Uncle Sam sculpture for "Empires & Allies", ''Zynga Bingo,'' ''CastleVille'' and ''Hidden Chronicles.''
Zynga games are available on a number of platforms including Facebook, MySpace, Yahoo, the iPad, the iPhone and Android devices.