10% of zynga's market share equals $300m...

FarmVille, Mafia Wars maker Zynga is worth $3 billion, says trading site SharesPost

February 18, 2010

Games company Zynga, developer of the runaway hits Farmville and Mafia Wars, hasnt filed for an IPO yet. So we dont know for sure what Zyngas market value will be if that happens.

But a study done by research form Next Up for pre-IPO trading service SharesPost says Zynga is worth three billion dollars, putting it in the same league as Facebooks estimated $5B valuation.

SharesPost lets customers buy and sell shares in companies that have not yet begun trading publicly on a stock exchange such as the Nasdaq or NYSE. Employees and investors in Facebook, Twitter or Tesla Motors, for example, could sell some of their shares to people who otherwise wouldnt be able to get in on these companies financial successes.

To encourage traders to feel informed about their purchases and sales, SharesPost publishes research by firms including Next Up on the companies whose shares SharesPost trades.

Hence, Next Ups estimate of Zyngas market value. We have used two methods, Next Up researchers wrote in their report. Steady-state target EV/Revenue multiple, and comparative EV/Revenue multiple based on a peer group. We arrived at a market cap of $2.806 billion to $3.315 billion for Zynga, and an estimated price per share of $14.97 to $17.68.

What that means is, Next Up analysts looked at estimates of how much cash Zynga is raking in, and how well similar companies are doing in terms of income and valuations.

http://venturebeat.com/2010/02/18/zynga-farmville-sharespost-mafia-wars/

JB