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Zynga Looking To Double Its Paying Customers Following IPO
Zynga Looking To Double Its Paying Customers Following IPO
December 9, 2011 | By Mike Rose




With its initial public offering due to start trading next week, Zynga has told investors that it believes it can double its current number of paying customers.

As part of an investors luncheon, and as reported by business website Reuters, Zynga chief executive Mark Pincus explained that, at this moment in time, less than three percent of the company's 227 million monthly active users -- around 7.7 million -- are considered paying customers.

However, he said that, following the opening of its IPO trading, Zynga will be looking to extend that figure. "We could see that doubling," he told investors, although he did not give a specific timeframe.

Pincus also said that the company currently has 13 million daily average users for its mobile games, up compared to the 11.1 million it stated in October.

Zynga filed papers earlier this month with the Securities and Exchange Commission, detailing plans about its upcoming IPO that will begin trading on December 16.

The company is looking to raise between $850 million and $1 billion as part of the IPO, with a $5.9 billion to $6.99 billion valuation.


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Comments


Harry Fields
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Pump that stock, Pincus... you can do it! Promise things you have no intention of delivering and get filthy rich in the process. I love bold predictions without numbers or time lines. Gives me warm fuzzies all over.

Lars Doucet
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Ladies and Gentlemen, I present you Tech Bubble 2.0

Harry Fields
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Exactly, and anyone dumb enough to consider this an "investment" deserves to lose every dime. Saying that, I'm sure my unwatched 401K will be heavily vested in Zynga stock due to the asinine insanity of Wall Street "Analysts". C'est la vie.

Leo Gura
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Let's be accurate here. Is Zynga over-priced? Probably. Is Zynga a husk of a company without significant profits and no proven market? Definitely not! Zynga has an entrenched position in the Facebook games market, and that will exist for a long long time. Zynga's not about to fold up, no matter how much core gamers despise them.

Lars Doucet
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@Leo:



I agree they're not going to evaporate overnight.



That being said, they've got a really toxic corporate culture. Anyone buying their IPO stock is in for a major reckoning when all their talent leaves once their stock options vest.

Leo Gura
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Lots of companies treat their employees like crap. Unfortunately, that doesn't really affect their bottom line (which is why they do it). Sure, Zynga is not your typical game studio, but that just means their culture is more marketing-centric rather than game-design centric. Most publicly traded companies work that way. Also, if you make the argument that Zynga's games are shallow and mostly successful due to marketing loopholes that gave Zynga the early bird advantage... then it's hard to argue that retaining talent is critical to Zynga continued profitability. Yes, I'm sure they'll lose talent once they go public, but that talent will be replaced without much problem because it wasn't creative talent to begin with.



Zynga has monopolized the Facebook market, and that monopoly is what you're paying for when you buy the stock. As I see it, the real debate should be about Zynga's P/E ratio and whether it has any potential to, say, double or triple profits over the next 5 years. Even a high P/E is acceptable as long as the company has massive potential for growth. Unfortunately, I think Zygna's saturated the market and now has too much downside. They're going IPO too late in the game, leaving very little on the table for investors. It's a more clever form of pump-and-dump.

Carlo Delallana
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Mistreatment of employees can affect the bottom line:



http://blogs.hbr.org/cs/2011/12/employees_who_identify_with_th.ht
ml



"But your company's character can earn you or cost you real money. Our research on thousands of managers, frontline employees, and customers of a U.S. retailer shows that there are connections between customer spending and what's known as the organizational identification of the people who work at the company. The greater the OI (organizational Identification), as researchers like to call it, the greater the spending. And organizational identification is, to a great extent, about company character."

Ken Love
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So's I say's to ya's... "Good Luck wit dat."

Luis Blondet
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Mark is trying to Pump And Dump the Zynga Bubble.



So many clueless investors that know nothing of games will lose hard ;_;


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