By Hugo Miller and Jonathan Erlichman - Mar 14, 2012 7:37 PM GMT+0700
Zynga Inc. (ZNGA), the social-gaming company that held its initial public offering in December, is planning a secondary offering of $400 million, saying it will improve the distribution of its stock.
The share sale is being underwritten by Morgan Stanley (MS) and Goldman Sachs Group Inc., as well as Bank of America Merrill Lynch (MER), Barclays Capital, Allen & Co. and JPMorgan Chase & Co., the San Francisco-based company said in a regulatory filing today. Zynga won’t receive any proceeds from the offering.
March 13 (Bloomberg) -- Carter Mack, president of JMP Group Inc., talks about the potential benefits of an additional share offering for Zynga Inc. and the outlook for the social gaming company. He speaks with Cory Johnson on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)
The move is designed to let investors sell some stock while getting large shareholders to agree to a longer “lockup” period that keeps them from unloading shares, three people familiar with the plan have said.
Zynga, which gets most of its revenue from Facebook Inc. (FB) users, is trying to avoid the fate of LinkedIn Corp. (LNKD), which saw its stock drop following the expiration of its lockup period in November, said two of the people. Company insiders are typically forbidden from unloading shares for six months after an IPO, in part to keep sell orders from flooding the market. Zynga’s new offering will be held before its lockup ends in June, they said.
To contact the reporters on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net; Jonathan Erlichman in New York at jerlichman1@bloomberg.net
To contact the editor responsible for this story: Ville Heiskanen at vheiskanen@bloomberg.net
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