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Online game-maker Zynga raised an amazing $1 billion in the single biggest Internet IPO since Google in 2004. The company made its stock market debut on Friday with results essentially flat.
After rising 10 percent above the $10 offering price, it fell to as low as $9.50, then recovered to around its original $10.
From Time.com:
Zynga’s lukewarm debut could mean a number of things. First, it could indicate that the company’s IPO underwriters, including Morgan Stanley and Goldman Sachs, accurately gauged market demand for the stock and priced the offering accordingly. It could mean that investors remain spooked after earlier Internet IPOs, such as Groupon and Pandora, spiked hard in first-day trading, only to eventually dip below the offering price. Or, it could simply mean that investors are not convinced about Zynga’s business model and prospects. After all, only 3% of the company’s users actually spend money on virtual goods, and the company remains highly dependent on Facebook, the platform on which the overwhelming majority of Zynga’s users play its games.
Zynga’s product line includes a popular Texas Hold’em game.
- Aaron Goldstein, Gambling911.com
