­Zynga eyes market float

 
Steve Dinneen
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SOCIAL games designer Zynga could file for a multi-billion dollar IPO as soon as next month.

It is understood the firm is eager to cash in on the vociferous investor appetite for technology stocks following the bumper flotation of LinkedIn last week.

The professional social network saw its shares surge 171 per cent during its first day trading to reach a market cap of an eye-watering $11bn (£6.8bn), despite posting 2010 earnings of just $15.4m.

Zynga has been valued at as high as $9bn based on shares trading on the secondary market and fundraising talks with investors.

It looks set to be the next in a line of high profile internet companies hoping for sky-high valuations. Facebook, which has been valued at more than $60bn, plans to float in 2012 according to chief executive Mark Zuckerberg. Microblogging site Twitter has been valued at $10bn while Groupon is said to be hoping for a flotation of up to $20bn.

Zynga, which has 248m monthly active users, is best known for games playable through Facebook including FarmVille and Mafia Wars. They allow users to purchase in-game credits for actual money. It is backed by investors including Foundry Group, Union Square Ventures and Kleiner Perkins.

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Zynga is understood to be in talks with Goldman Sachs and Morgan Stanley as it prepares to choose bankers for its IPO this year. Morgan Stanley is fresh off last week’s successful float of LinkedIn. The valuation range was questioned after LinkedIn’s market cap surged from its listing price of $4.25bn – already 30 per cent above its initial range – to $11bn. If chosen, the banks will be keen to ensure Zynga’s price reflects the red-hot demand for tech stocks.