Zynga is preparing to sell additional shares to the public as part of a secondary offering, according to people familiar with the situation. The online gaming company could file deal paperwork with the Securities and Exchange Commission as early as tomorrow, these people added.
The deal will be led by the same group of bankers that shepherded the company’s initial public offering in December, which included Morgan Stanley, Goldman Sachs, Bank of America, Barclays, JPMorgan and Allen & Company.
The exact size of the deal remained unknown, but is likely to be less than the company’s IPO which raised $1 billion. A spokesperson at Zynga declined to comment.
In the month or so following the company’s debut on the Nasdaq, shares struggled to break issue price, dimming any prospects of a secondary offering. However, thanks in part to positive headlines about its Facebook user base and the recent announcement of a new gaming platform, shares have significantly rebounded closing more than 30% above IPO price as of Tuesday’s market close.
While the price of the new shares remains unknown and discussions remain fluid, it is commonplace for shares to be sold at a discount to current market price.
Since 2000, secondary offerings in the US have sold to investors at a discount of roughly 2.6%, according to Dealogic.
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