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Big Expectations for Zynga IPO

Expected to file as early as today, analyst says
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And the IPOs just keep on coming.

Later today, online social gaming powerhouse Zynga is expected to file for its IPO, making it the latest tech company to advance toward a public debut.

For months, reports have circulated that the company known for Farmville and other popular Facebook games would soon file documents for an initial public offering.

But citing an original venture capitalist in Zynga, Nitsan Hargil, director of research for GreenCrest Capital, said he expects the company to file the necessary paperwork as early as today. Zynga and Morgan Stanley said they were unable to comment. While the initial documents will not offer a price range for shares in the company, Hargil said that back-of-the-envelope calculations indicate that the IPO could raise about $1.5 billion, giving the company a $15 billion valuation. He also said he anticipates that just a small tranche of about 10 percent of shares will be offered to the public. The IPO documents will give investors a first look at the company’s financial situation, which Hargil expects to be in healthy shape.

“This is a company that is comfortably and easily profitable,” he said. “I think it will be good all around.”

Not only is Zynga already on solid footing, he said, when Facebook Credits becomes the platform’s only virtual currency on July 1, Zynga, which charges users real money for virtual goods, stands to grow even more.

“No longer will they have to give credit card information to Zynga, nor will it feel like real money,” he said.

Another plus for Zynga is that unlike other companies in the space that spend like “drunken sailors,” Zynga’s leaders know how to keep costs down, Hargil said.

“The company has power, they’re using that power intelligently, they’re able to monetize it, and they’re able to keep costs very much under control,” he said.