Zynga, Jive Software to head big IPO week

By Benjamin Pimentel 

SAN FRANCISCO (MarketWatch) -- Eleven firms, including the social-gaming start-up Zynga, are expected to launch as publicly traded companies next week, in potentially the busiest IPO week in four years.


Zynga leads the pack as the latest in a wave of social-media initial public offerings. Also drawing attention is Jive Software, a social business-software-platform company, and Michael Kors Holdings, the luxury fashion company.


If all firms push ahead with their IPOs, it would make next week the busiest since November 2007, when 13 companies made their public trading debuts in a single week, according to Scott Sweet, senior managing partner at IPO Boutique.


Sweet noted that next Thursday will be particularly crowded, with six deals expected to launch.


"That's going to make it very difficult for all six to get equal eyeballs," Sweet said. "Only the best will get attention, as it always should be. When you have six in a day, that's really heavy."


He allowed that market uncertainty may still lead to changes in the schedule. Three deals were scheduled to debut this Thursday but were pulled, the companies citing market conditions. Still, Sweet said, "I expect it to be a very active week."


Zynga's position among those on deck is a key reason. The San Francisco-based tech company, which is offering 100 million shares at a price range of $8.50 to $10, is set to raise as much as $1 billion. That would make Zynga's offering the biggest Internet IPO since Google Inc.'s (GOOG, Trade ) launch in 2004, according to Renaissance Capital.

In a sign of the growing prominence of social-media IPOs, Jive Software also is expected to enjoy a strong debut. The Palo Alto, Calif.-based company makes software to help businesses set up their own social networks. It had total revenue of $54.8 million for the nine-month period ended Sept. 30 -- up 73% from the same period last year. Net losses totaled $38.1 million for the recent nine-month period.

Jive is offering 11.7 million shares at a price range of $8 to $10. The stock is expected to begin trading Tuesday.

Other firms in Internet and social-media segments have already made their debuts this year. LinkedIn (LNKD, Trade ) made its IPO in May, while Groupon (GRPN, Trade ) and Angie's List (ANGI, Trade ) debuted last month.

Another relatively high-profile IPO for next week is that of Michael Kors Holdings, the fashion design company, which is offering 41.7 million shares at a range of $17 to $19.

Other companies expected to go public are five oil or energy companies: Bonanza Creek Energy, Sanchez Energy Corp., Mid-Con Energy Partners, Inergy Midstream and Laredo Petroleum.

Also going public are Luxfer Holdings, a materials technology company; FusionStorm Global, which offers information technology hardware, software and services to businesses; and GSE Holding, a maker of containment products in mining, waste management and environmental protection.

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LinkedIn Feels the Analyst Love!

By Chris Dieterich

Look who’s suddenly more bullish on LinkedIn.

Analysts at J.P. Morgan and Morgan Stanley upgraded the stock to buy today, while Bank of America analysts bolstered their standing buy rating by raising 2012 earnings estimates.

All were underwriters of LinkedIn’s May IPO.

LinkedIn shares have suffered over the past month in part because the number of the company’s freely tradable shares roughly tripled, from about 8 million to 29 million, after a secondary offering and the expiration of a prohibition that bars employees and some early investors from selling shares.

Morgan Stanley sets the Street’s tallest price target at $100, saying: ”We see this weakness as a buying opportunity as the company appears to be firing on all cylinders in each of its three business segments.”

LinkedIn shares rise on J.P. Morgan upgrade!

By Dan Gallagher




SAN FRANCISCO (MarketWatch) -- Shares of LinkedIn Corp. LNKD rose more than 4.5% to $73.12 on Tuesday(12/6) morning after the business-focused social network was upgraded to an overweight rating by J.P. Morgan. In a note to clients, analyst Doug Anmuth said the shares are "more compelling at current levels." LinkedIn shares had fallen about 25% since late October. "However, the company has shown strong operational performance and we believe deeper corporate penetration and increasing member engagement will drive strong results going forward,"

IPO Underwriters More Bullish On LinkedIn

 Look who's more bullish on LinkedIn (LNKD). JPMorgan and Morgan Stanley upgrade the stock to buy, while BofA piles onto its buy rating by raise 2012 earnings estimates. All were underwriters of LinkedIn's May IPO. LNKD has suffered over the last month in part because its freely tradable shares roughly tripled, from about 8M to 29M, after a secondary offering and the expiration of a prohibition that bars employees and some early investors from selling shares. Morgan Stanley sets the Street's tallest price target at $100: "We see this weakness as a buying opportunity as the company appears to be firing on all cylinders in each of its three business segments." 

Zynga Sets 100M-Share IPO At $8.50-$10/Shr

By Lynn Cowan 

Online games developer Zynga Inc. set the terms of its planned initial public offering Friday, seeking as much as $1 billion by selling 100 million shares at a price between $8.50 and $10.

At the $10 end of its IPO range, Zynga commands a valuation of nearly $7 billion, according to an updated prospectus filed Friday.

The company is best known for such social games as FarmVille and Mafia Wars, played on Facebook's social networking website. Zynga is scheduled to launch its marketing road show Monday, and expected to begin trading on the Nasdaq under the symbol "ZNGA" by Dec. 16.

Zynga's IPO is smaller than what the company originally hoped it could obtain from the public markets. When it first filed to go public in July, it was seeking to raise $2 billion with a valuation of $20 billion, people familiar with the matter said.

But the proportion of the stock it is floating in the IPO is a bit larger than at many other Internet-related IPOs in recent months. The company plans to sell about 14.3% of its outstanding shares, compared to the 5.5% offered by Groupon Inc. (GRPN) and 11% offered by Angie's List Inc. (ANGI), excluding over-allotment options.

When Zynga first filed its IPO plans, it was part of a rush of technology offerings hitting the market. Professional networking site LinkedIn Corp. (LNKD) doubled on its first day of trading in May and real estate website Zillow Inc. (Z) gained 79% in July.

But the steep market selloff that hit in August led both the daily deals site, Groupon, and Zynga, as well as many others, to hold off on their IPOs because of the high level of investor jitters.

Groupon, which priced above its expected range last month and rose nearly 31% on its first day of trading, is currently beneath its IPO price. Angie's List, which priced at the high end of its range and gained 25% during its debut last month, is also below its IPO price of $13 a share. Zillow has given back almost all its gains since July; it is now 8% above its IPO price, compared to its 79% pop months ago.

But Zynga differs from the others in several ways. Neither Groupon, Zillow nor Angie's list were profitable when they debuted, and there have been concerns raised about the amount that Groupon and Angie's List must spend to market themselves to new users.

Zynga's top line revenue is growing swiftly, but it has also been booking profits since last year. Its games are free to play, so it makes its money primarily by selling virtual goods to players, and also through advertising. In the first nine months of the year, its total revenue doubled to $829 million from the same period a year earlier. Its net income declined 35% to $31 million during the same time, solely on higher income taxes; income before income taxes was up 48% at $82 million.

Although Zynga's games are available on other social networks and mobile platforms, substantially all its revenue is derived from Facebook-accessing players. It has the largest player audience on Facebook, with more monthly active users than the next eight social game developers combined, according to AppData, an independent service that tracks application traffic on Facebook.

An obvious risk for Zynga is its reliance on Facebook, which has a lot of muscle when it comes to changing its rules for applications that appear on its platform. The social media site now requires apps to use Facebook's proprietary payment method, Facebook Credits, as the primary means of payment collection. As a result, Facebook now receives a greater share of payments made by Zynga's players than it did when other payment options were allowed.

Morgan Stanley (MS) and Goldman Sachs Group Inc. (GS) are managing Zynga's IPO.