Around the Net

Zynga Wants Cake With IPO, To Eat It, Too

Similar to the strategy used by LinkedIn, Zynga plans to sell a small number of shares in its IPO, Bloomberg reports, citing sources. The idea is that a company can retain more control, while raising money to expand. By selling little stock in the IPO, companies protect the value of existing investors' stakes," Bloomberg explains. As such, sources say Zynga may make less than 10% of its shares available to the public in its IPO.

In the past year, according to Bloomberg data, U.S. technology IPOs offered up an average of 24% of company stock. LinkedIn is up 73% since its IPO, and Bloomberg thinks Zynga Chief Executive Officer Mark Pincus is betting on a similar rise.

"Companies in this space realize there's a feeding frenzy afoot," David Menlow, president of research firm IPOfinancial.com, tells Bloomberg. "The risk is that as a CEO you believe you are better than you actually are. The reality may be something very different."

Read the whole story at Bloomberg »

Next story loading loading..