Social game developer Zygna has raised a total of US$1 billion for its initial public offering (IPO), pegging its value at US$7 billion.
The company sold 100 million shares, priced at the top end of its expected range of US$10 each, Bloomberg reported Thursday. Zynga had indicated a share price of between US$8.50 and US$10 in its U.S. Securities and Exchange Commission (SEC) filing.
According to Bloomberg, the US$1 billion IPO is the biggest by a U.S. Internet company since Web titan Google raised US$1.9 billion for its public debut in 2004. Zynga is now valued at about US$7 billion, which is 6.8 times its revenue in the year ended Sep. 30, 2011.
Zynga's surging sales appeals to investors seeking growth that outpaces those in Standard & Poor's 500 Index, Tim Cunningham, a money manager at Thornburg Investment Management, told Bloomberg. "Growth is really scarce, so I think that makes it more valuable than usual."
Zynga, which social games on Facebook such as Farmville and Words With Friends had been largely responsible for the company's success, was initially expected to be valued at US$15 billion to US$20 billion. It was lowered to US$1 billion when it filed for its IPO in July.
The five-year-old company now joins a list of Internet and social media companies that went public this year under much media scrutiny, including professional networking site LinkedIn which listed in May, and daily deals company Groupon just last month.
Zynga's IPO comes shortly after the public debut of another online game developer, Nexon, which raised US$1.2 billion on the Tokyo Stock Exchange on Dec. 14. According to the Bloomberg report, the stock dipped 4.3 percent since the offering. Nexon, which was founded in South Korea, is currently headquartered in Tokyo, Japan.