Zynga Inc, the biggest maker of games on Facebook Inc, is seeking a valuation of as high as US$10 billion in an initial public offering, according to two people briefed on the matter.
Zynga plans to raise about US$900 million by selling shares at between US$8 and US$10 apiece, said one of the people, who asked not to be identified because the plans have not yet been made public.
Zynga would sell 10 percent or fewer of its outstanding shares, which are scheduled to be priced on Dec. 15, the person said.
At US$10 billion, Zynga would be valued at below the US$14.05 billion that the company said represents its fair value in regulatory filings. Zynga would also be the -second-largest US game company after Activision Blizzard Inc, which has a capitalization of US$14.2 billion.
Electronic Arts Inc, which bought Zynga rival PopCap Games in August, has a market value of US$7.69 billion based on yesterday’s close.
Dani Dudeck, a spokeswoman for San Francisco-based Zynga, declined to comment.
Under chief executive officer Mark Pincus, Zynga aims to capitalize on the popularity of social networks and virtual goods. The company lets users play games for free and then makes money by selling items — say, a townhouse in CityVille or a shipyard in Empires & Allies.
Founded in 2007, Zynga has hired Morgan Stanley and Goldman Sachs Group Inc to manage the IPO. Zynga’s shares will trade on the NASDAQ Stock Market under the symbol ZNGA.
Zynga updated its filings on Nov. 4 to show that 6.7 million of its users were paying customers in the first nine months of this year, up from 5.1 million in the year-earlier period. Revenue more than doubled to US$828.9 million.
The company posted US$30.7 million in net income in the nine months that ended in September, down from US$47.6 million a year earlier.