Pincus upbeat on tough IPO

Pincus upbeat on tough IPO
Craig Chapple

By Craig Chapple

January 17th 2012 at 10:17AM

Admits renegotiation of stock compensation to early employees 'probably wasn't a good idea'

Zynga CEO Mark Pincus remains positive about the company’s recent IPO, despite falling below the original $10 offering price.

Speaking to The Wall Street Journal, he claimed the social games giant had hit the targets it set out to achieve, and was hopeful over the company’s future.

“Our goals were we want to raise a billion dollars,” said Pincus.

“Through going public, we wanted to add some more great long-term investors to the company. All of that was successful.”

He added on the fall in stock price: “I don't blame anybody because from our standpoint, we think it was successful.

"It was many times larger than the other tech IPOs that had just happened recently. We think we're now well positioned to move forward in the future.”

He also said that he felt it was the right time in the company’s growth to go public, despite the economic troubles in the US, and had never tried to time the markets.

Working culture

Pincus also discussed Zynga’s oft-criticised alleged working practices, stating the culture inside the firm is “not ultra competitive”, and that the social games giant has a history of levelling up through promotions, with more than 60 per cent of the work force levelling up every year for the last three years.

He admitted however that the renegotiations of stock compensation to some early employees was perhaps retrospectively not a good idea, highlighting four cases in particular.

“I realise that that wasn't a model that had been done in Silicon Valley, and we're always as a company trying to invent new models, and not all of them are worth keeping and repeating,” he said.

“That's never been a policy at our company, and probably I'd say in retrospect, given how much that blew up, and questioned traditions in the Valley, I think probably wasn't a good idea.”

Wedbush analyst Michael Pachter recently stated that despite the Zynga IPOs early disappointment, he expects the share price to reach $12.5 by the end of December this year.

"By virtually any metric, it is clear that Zynga is the dominant developer of social games, claiming six of the top ten most popular games on Facebook by DAUs," he said in a report issued last month.

"We believe that Zynga's dominance is its key strength as the company leverages its large installed base of players each time it launches a new game."