Zynga Inc., the biggest maker of games on Facebook, received enough orders to cover all the shares being sold in its initial public offering, said two people with knowledge of the situation.
The people declined to be identified as the process is private. Zynga plans to sell 100 million shares for $8.50 to $10 apiece, according to regulatory filings. The high end of that price range would value San Francisco-based Zynga at $7 billion.
The IPO would be the largest by a U.S. Internet company since that of Google Inc. in 2004. Filling the orders for Zynga’s shares a few days into the roadshow is a good sign, said Lise Buyer, principal of the Class V Group, an IPO advisory firm in Palo Alto, California.
“They’re off to a promising start,” Buyer said. “But it’s way too early to draw any conclusions because an indication in the book is not a commitment. If the euro zone falls apart on the 9th, all bets are off.”
Zynga is offering about 14 percent of its common stock, a larger portion than companies including Groupon Inc., LinkedIn Corp., and Pandora Media Inc. have sold this year in their public debuts. Morgan Stanley and Goldman Sachs Group Inc. (GS) are managing the offering, according to the filing.
Dani Dudeck, a spokeswoman for the company, declined to comment, as did Pen Pendleton, a spokesman for New York-based Morgan Stanley, and Andrea Rachman, a spokeswoman for New York- based Goldman Sachs.
Zynga plans to list under the symbol ZNGA on the Nasdaq Stock Market. The IPO values Zynga at as much as 6.8 times revenue in the year through Sept. 30, or more than three times rival Electronic Arts Inc. (ERTS)’s price relative to sales over the same period.
The company, founded by Mark Pincus in 2007, makes games such as FarmVille, CityVille and Mafia Wars, which are available via Facebook Inc. More than 90 percent of Zynga’s revenue comes from the social-networking site, the most popular in the world.
Facebook itself is considering raising about $10 billion in an IPO that would value the company at more than $100 billion, a person with knowledge of the matter said last month.