Zynga CEO Mark Pincus on IPO: We got what we wanted
The Zynga CEO says his company's ultimate goal was to raise $1 billion in an IPO, and it was successful in achieving that.
Zynga CEO Mark Pincus says his company achieved its goals after going public last year, even though some investors didn't get what they had hoped for out of the stock.
"Our goals were we want to raise a billion dollars," Pincus told The Wall Street Journal in an interview published today. "Through going public, we wanted to add some more great long-term investors to the company. All of that was successful."
But what about the individual investor? Zynga went public late last year at $10 a share. In its first day of trading, its stock was down 50 cents to $9.50 a share. Since then, it has gone as low as $7.97, before starting to make a comeback last week. As of this writing, its shares are at $9.11.
For investors, it's tough to find good insight into what they should do with Zynga. Although the company was profitable in 2010, generating nearly $91 million in net income, the first nine months of 2011 only yielded at $31 million profit. What's worse, the vast majority of Zynga's revenue and accounts receivable come from Facebook, putting it in a potentially risky situation if the relationship between the companies breaks down.
There's also the issue of analysts not being able to agree on its value. As of this writing, nine analysts have chimed in on Zynga. Four analysts evaluating Zynga's stock say it's worth buying, while another four say it's best to hold onto it. The ninth analyst says current shareholders should sell the stock.
It also doesn't help that Pincus seems far more focused on his company's cash than its stock price--a major concern for shareholders.
"I don't blame anybody because from our standpoint, we think it was successful," Pincus said of his company's IPO to the Journal. "It 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."
But Pincus has also been forced to look back. Before Zynga went public last year, the company faced criticism for having a highly competitive environment that put enormous pressure on employees. It was also revealed that Pincus had a so-called "MIA List" in his office containing employees whose contributions to Zynga--in the exec's eyes--didn't necessarily justify the potential cash windfall they could receive when the company went public. That report was followed by claims that many Zynga employees were planning to leave the company after the social-gaming firm went public, due to the stresses in their work environment.
For his part, Pincus acknowledged in the Journal interview that he had a list in his office of people that weren't working on mission-critical functions and needed to be reassigned on them. He also admitted to reworking compensation packages on four "senior leaders," but said that they were "isolated incidents."
One other interesting tidbit from the Pincus interview: he's watching the online gambling space "with interest" to see if there are opportunities there for Zynga.