Where there’s a mention of “tech,” the word “bubble” is never far behind. The wildly popular gaming company Zynga made its New York Stock Exchange debut at $10 per share, but dropped 5% on the first day of trading and didn’t recover, which had many analysts wondering if the company could live up to the hype.
Zynga CEO Mark Pincus seems less concerned. ”Our goals were we want to raise a billion dollars. Through going public, we wanted to add some more great long-term investors to the company. All of that was successful,” Pincus told the Wall Street Journal. The CEO also pointed out that Zynga’s IPO was ”was many times larger than the other tech IPOs that had just happened recently. We think we’re now well positioned to move forward in the future.”
The other tech IPOs to which he refers could be LinkedIn, which raised $352.8 million at its New York Stock Exchange debut in May; Pandora, which raised at $234.9 million in June; and Groupon, which raised $700 million in November. Looking at the numbers in terms of money raised rather than price per share, Zynga’s $1 billion, in comparison, is larger.
Going forward, Pincus said the company will base its ad revenue on product placement and virtual goods rather than pop-up ads. He also hinted that the company could pursue online gambling, which would pair addictive online social games with actual money. (Watch out, 43-year-old women.)
As for the company culture, Zynga was recently criticized for asking some of its founding employees to give back their unvested stock shares. (Which, aside from being bad form, significantly lowered their chances of going on Millionaire Matchmaker, like this Groupon copywriter did in August.)
But Pincus explained to the Wall Street Journal, “Any company, especially in Silicon Valley, that is growing quickly can outgrow the capabilities of senior leaders, and that happens all of the time. We did, especially growing as fast as we have. In four isolated incidents, we outgrew senior leaders and we wanted to find them another position at the company versus just parting ways. They had the option to leave and have a package, as happened with some other leaders, but we in addition to that offered them other positions at the company that came with different forward compensation.”
Where are they now? Said Pincus, “…in two of those four cases, those people are at the company and they’re wonderful executives and contributors who have found other opportunities to lead…”
Image by Stuart Miles via Shutterstock