Zynga Inc., the biggest developer of games for Facebook, will file for an initial public offering Wednesday, according to GreenCrest Capital Management, which cited a “major investor” in the start-up.
The company has chosen Morgan Stanley to be the lead underwriter of an offering that will raise more than $1 billion, said Nitsan Hargil, an analyst at GreenCrest, which focuses on closely held firms. He didn’t name the investor, saying only that it was an early backer of Zynga.
Zynga, known for FarmVille and Texas HoldEm Poker, is joining the biggest wave of Internet IPOs since the dot-com heyday in 2000. LinkedIn Corp., Pandora Media Inc. and Yandex all went public in the last two months, and other Internet companies such as Groupon Inc. aim to benefit from the rebound with their own IPOs.
“Of all the companies we’re looking at, it’s the one we’re most excited about because it’s a real company with real revenues,” Hargil said about Zynga.
Dani Dudeck, a spokeswoman for the San Francisco company, didn’t immediately comment. Pen Pendleton, a spokesman for Morgan Stanley, declined to comment.
Zynga’s sales will reach about $1.5 billion this year, generating $500 million of net income, Hargil estimates. The company doesn’t need the money it will raise from selling shares, the New York-based analyst said. Goldman Sachs Group Inc. will be another underwriter of the IPO, Hargil said.
“It simply is a way to give the company access to cheap capital and give the investors and employees who’ve invested time and money into the company an ability to monetize that,” he said.