Zynga IPO

Zynga, the online games provider within Facebook, recently filed for a forthcoming IPO.
Share price has not been announced but it is anticipated that they will attempt to raise $1 billion with a company valuation of $15 -$20 billion.

A valuation of $16 billion gives a 33 times revenue multiple.
By comparison the Linkedin IPO in May gave Linkedin a valuation of 17 times revenue, about half that forecast for Zynga.

Comparing Zynga to Linkedin shows Zynga in a much stronger financial position with a larger user base.

Zynga 2010 revenue was $597m compared to $243m with Linkedin.
Zynga 2010 income from operations was $125m compared to $3.4m with Linkedin.
And Zynga report 116m monthly unique users of their service at end of 2010 compared to 46m monthly unique users of the Linkedin service.

So Zynga is a far more profitable operation than Linkedin and more than double the revenues and user numbers.

So we can expect to see a larger valuation for Zynga than $16 billion.

LinkedIn IPO

comparing LinkedIn IPO in 2011 with Google IPO 2004

Google raised $1.6bn for market cap of $23bn with 17% rise at end of trading day one. Google profits were $105m on revenues of $961m in previous accounting year. 7% of shares were offered.

LinkedIn raised $350m for market cap of $4.3bn with 108% rise at end of trading day one. LinkedIn profits were $3.4m on revenues of $243m in previous accounting year. 8% of shares were offered. LinkedIn does not expect to be profitable in 2011.

The market of 2011 is a lot more generous than 2004. Or is it desperate to find a home for its cash?