Zynga Investors to Sell $400 Million in Stock
The maker of "Words With Friends" is hoping to avoid a volatile stock price when its IPO lock-up period ends.
Three months after its initial public offering, Zynga said Wednesday it will sell about $400 million in shares in a follow-on offering, though the money will flow to its large, early investors and not the company.
The move is designed to increase the number of shares in the public float, and, in allowing some shares to sell prior to others, to smoothe out choppy trading associated with the expiration of an IPO lock-up period.
Morgan Stanley and Goldman Sachs are expected to purchase many of the shares and not resell them until after May 28.
Zynga, the maker of Words With Friends, CityVille and other games for handheld devices, went public on Dec. 16 at $10 per share. In midday trading on Wednesday the stock was down 1 percent to $13.28.
"The secondary offering has the potential to be a positive, as it addresses the staggering of the expiration dates of lock-up agreements," said Wedbush Securities analyst Michael Pachter, who has a $17 price target on the stock.
- 'Lindsay' Recap: Lohan Attempts Career Comeback With Self-Proclaimed 'New Chapter'
- 'How I Met Your Mother': Cristin Milioti Debunks Morbid Finale Theory (Video)'
- Josh Duhamel to Co-Star in Vince Gilligan's 'Battle Creek'
- A Train, a Trestle and 60 Seconds to Escape: How 'Midnight Rider' Victim Sarah Jones Lost Her Life
- 'Divergent' Star Shailene Woodley: The Next Jennifer Lawrence?
- MOST SHARED
- MOST POPULAR
- DJ Cassidy Shares Details On New Album, 'Paradise Royale,' And The Resurgence Of Disco
- 7-Year-Old Stuns Viewers When She Sings 'Gloomy Sunday' By Billie Holiday (VIDEO)
- The CW's 'Star Crossed' Is The Classic WB Show You've Been Waiting For
- Love 'Cosmos?' Then NASA's 'Images Of A Space-Time Odyssey' Will Make Your Jaw Drop (PHOTOS)