

Zynga Raising $500 Million at $10 Billion Valuation - kiriappeee
http://kara.allthingsd.com/20110217/zynga-raises-500-million-at-10-billion-valuation/

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r00fus
$10B valuation? This is unreal. On what is this valuation based other than
"comps"?

How did valuation against comparables work to match reality for the real
estate bubble?

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patio11
Zynga has revenues in the hundreds of millions, based on "You pay us money and
we pay you pixels." They have had explosive growth. Betting on that growth to
continue, FB to not bleed them dry, and users to continue loving their product
is a bet, but it isn't _crazy_ like saying a pet food company which loses
money on every shipment would make it up in volume and hit the same valuation.

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r00fus
Ok, lets get serious here. $10B valuation / $250M revenue/year = 40x
multiplier.

Do people really think that Zynga is going to continue to deliver for years
and years to come?

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patio11
A 40x multiplier for a company growing as fast as Zynga is is totally
reasonable. They aren't a Fortune 500 blue chip whose growth is primarily
constrained by the market and macroeconomic factors: there are still more
people who have not experienced the joy of virtual cabbage farming out there.

I wouldn't sell my index funds and buy Zynga, but if Wall Street is investing
in them, I think that probably isn't in the top half of dumbest things Wall
Street will do this year.

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notahacker
I'm not sure there actually are that many people that haven't discovered the
joys of virtual cabbage farming that might be persuaded to do so. They claim
320 million people have tried a game, which is a staggeringly large proportion
of free internet users. The amount of worldwide free time spent on Zynga is so
ridiculously huge I genuinely can't see the potential for upward trends to
continue (other than cornering the Chinese social game market, which will be
tough). Unlike Facebook, I don't think it's fair to say they're only
scratching the surface of their revenue-generating potential either.

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guelo
_The round includes big institutional investors Morgan Stanley, T. Rowe Price,
Fidelity Investments_

Oh gawd, here comes Wall Street again, they ruin everything. Bubble 2.0!

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astrodust
I can't wait for the AAA-certified "Startup-Backed Financial Instruments" that
they can sell to all the pension funds they didn't totally bankrupt the first
time.

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robryan
Actually easier to obscure the true value of a startup than a mortgage, might
be onto something there.

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Kilimanjaro
Is zynga making more money than facebook?

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oceanician
Yes, there is no boom!!! WTF!!

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tsotha
This is just more proof that if God actually exists he probably hates us.

