Zynga Inc. (NASDAQ: ZNGA) was supposed to be a great social media and gaming initial public offering, but it has been trading as a busted IPO since it is under the $10.00 per share IPO price. The quiet period for research analysts that work for underwriting firms involved in its IPO is set to expire this week. That allows for more solid coverage by the firms which actually sold this one to their investing customers. Robert W. Baird jumped out ahead of the analyst pack with a rating initiation of “Outperform” and a price target objective on Zynga of $12.00 per share.
As far as who will initiate coverage likely this week… The book-runners were Morgan Stanley and Goldman Sachs; co-managers were Bank of America Merrill Lynch, Barclays Capital, J.P. Morgan, and Allen & Company.
Back around Zynga’s IPO another firm, Cowen & Co., started coverage with a “Neutral” rating but Zynga was later started with coverage at “Outperform” at Wedbush and also as “Buy” at Lazard.
Zynga shares are up about 6.5% at $9.71 today on more than 8.2 million shares with two hours left until the close. Its post-IPO range is $7.97 to $11.50.
Our biggest issue was not the financing nor even the great tie to Facebook. Our biggest concern was that out of the offering at the IPO the class of shares sold has only about 2% of the entire voting power in the company. Investors take on all of the risks and get no real vote.
JON C. OGG
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