Nearly half of all the shares sold in Zynga’s secondary stock offering will becoming from Zynga’s executives and directors, according to the written prospectus regarding yesterday’s share pricing.
The secondary offering will see holders selling almost 43 million shares of Zynga. Aside from the Class A common stock, which was priced yesterday at $12 a share, the developer’s executives and directors are unloading 20,254,631 shares of Class B stock, which carries 70.3 percent of total shareholder voting power. This is the first time these executives have been able to sell their Class B stock.
Pincus is selling 16.5 million Class B shares, approximately 15 percent of his stake in the company. COO John Schappert is selling 322,350 shares, about 45 percent of his holdings. CFO David Wehner is cashing in on 386,865 shares, almost 55 percent of his stock. Directors Reid Hoffman and Owen Van Natta are also cashing in — Hoffman is selling 687,626 shares, just under 15 percent of his stock and Van Natta is selling 505,267 shares, nearly 19 percent of his holdings.
The secondary offering’s timing is geared towards counteracting the approaching end of Zynga’s lock-up period — when all outstanding shares other than those sold during the IPO can’t be traded — which is set to expire on May 28. Both the lock-up period’s end and Facebook’s own expected IPO in May could influence Zynga’s stock prices dramatically, so putting this many shares on the market will theoretically minimize any potential volatility.
It’s only been four months since Zynga’s IPO, which was a mixed success. Although the developer raised the $1 billion it was hoping for, the stock fell below its initial $10-per-share and didn’t recover for a month. The stock has performed erratically since then and seen substantial gains and drops, though the revelation that Zynga accounted for 12 percent of Facebook’s 2011 profits helped buoy prices.
Zynga’s stock opened this morning at $12.26 a share, continuing a week-long price slip since the company announced its acquisition of Draw Something developer OMGPOP for $180 million.