More trouble for Zynga ahead of its upcoming IPO: Sources told the New York Post that the social-gaming developer, which had been planning to go public early next month, is considering a delay because of rocky conditions on Wall Street.
While Zynga “is still pursuing an IPO in earnest,” a source said, its public debut could be pushed back to November. “It wouldn’t be illogical for the bank to delay a sale, given the markets,” one source told the Post. “It makes sense for a bank to protect its clients from a market that could potentially be a bottomless pit.”
Zynga hopes to have a more solid time line after Labor Day, the source said.
Meanwhile, the company is also dealing with the SEC’s review of its S-1 filing. Zynga was already forced to amend its initial filing earlier this month after the SEC asked that it concentrate on strict revenue rather than the untraditional “bookings” metric, which calculated the sale of virtual goods in Zynga games.
The SEC was also concerned with Zynga’s statement in its initial filing that it relied on a small percentage of paying customers for almost all its revenue. In its amended filing, Zynga said that less than 5 percent of its users actually pay for virtual goods. Now, the SEC is asking the company to go into more detail about how many paying customers it has for each of its games—which Zynga is fighting hard not to reveal, a source said.