Zynga CEO looks to sell stake
The release would represent a 15% total stake in the company.
According to the Wall Street Journal, Zynga will not receive any proceeds from the offering, which the company filed for earlier this month, although it did not disclose any details at that time.
If the offering does go through, there will be 164.4 million Class A shares outstanding. That means that the 43 million shares represents a 15% stake in the company.
Zynga is looking to sell stock as it tries to reduce future volatility of the company's stock price, although that sounds suspiciously like a desperate company line. The CEO's proceeds from the sale would be $228 million, which seems to be a more valid reason.
Pincus plans on selling 19% of his Class B shares, or 17.3 million of the 43 million available. Class B shares will convert to Class A when sold.
Despite making a lot of money from the deal, Pincus' voting stake would still only drop to 35.9% from 36.5%, as he would remain the sole holder of Class C share. Class C shares have 70 times the voting power of Class A.
On Thursday, Wedbush published a research report stating that Zynga remains well-positioned for long-term growth. The company is likely to increase revenue in 2012 as it releases several new games and continues its mobile expansion, the report said. The company is also developing its Zynga.com site.
Zynga is buying OMGPOP, the maker of the hit game "DrawSomething." OMGPOP is on pace to generate as much as $50 million in annual bookings, according to analysts at PiperJaffray. "We believe M&A is the right choice in OMGPOP's unique case.”
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Investors are anxious to see if hiring can maintain its strong pace in the second half of the year.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.