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Shares Post Midas Zynga MCMNov11 2

Shares Post Midas Zynga MCMNov11 2

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ZYNGA IPO
ZYNGA IPO

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Published by: Primo KUSHFUTURES™ M©QUEEN on Feb 01, 2012
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Created:
11-6-11
Authoredby:
MidasLP
CompanyAnalysisZynga
This report has been downloaded from SharesPost, Inc., but was prepared by Midas LP, and any opinions contained herein aresolely the opinions of Midas LP. Information contained herein, including but not limited to research, valuations, calculations,estimates and any other material or sources, is believed to be reliable, however its accuracy and completeness is not warranted orguaranteed, and past performance is not indicative of future results. These materials are provided for informational purposes onlyand should not be used or construed as an offer to sell or a solicitation of an offer to buy any security. SharesPost, Inc. is not actingas nor is it registered as an investment advisor.
 
 1
SEE VERY
IMPORTANT
DISCLAIMERS AT END OF REPORT www.MidasLP.com
 
MidasLPPreliminaryStrategic InsightsAnd Analysis onZynga
Zynga Quick Stats 
2011E Revenues:
$1.5 billion
 2012E Revenues:
$2 billion+
 Last
Institutional
DirectValuation ($485 million round):
$10 billion
 
A more detailed analysis ofZynga is available to MidasLPaccredited investors. Foraccreditation see:investors.midaslp.com
 
www.midaslp.com Twitter: @midaslp Email: investors@midaslp.com LinkedIn: http://www.linkedin.com/ company/midas-lp Tel. (202) 536-5864 
© COPYRIGHT 2011 MIDASLP RESEARCH, ALL RIGHTS RESERVED 
November | 2011
MidasLP
 
MIDASLP Preliminary Strategic Insights And Analysis
Overview
Founded in 2007 by Mark Pincus and Eric Schiermeyer and located in SanFrancisco, CA, Zynga is the largest social-network game developer and hasgenerated over $1.5 billion in cumulative bookings since its inception. Zyngadevelops browser-based games that work both stand-alone and as application
widgets on social networking websites such as Facebook and MySpace. Zynga’s
mission is to connect the world through games by making them easily accessibleas well as simple to play.
As of September 2011, Zynga’s games have over 2
32million monthly active users on Facebook. Four of the five most popular socialgaming applications on Facebook are Zynga games: CityVille, Empires & Allies,Texas HoldEm Poker and FarmVille. Zynga has approximately 2000 employees in 5countries including China, Japan, Germany, Toronto and India.Zynga filed with the SEC to raise up to $1 billion in an initial public offering on July1, 2011.According to AppData, as of June 30, 2011, Zynga has more monthly average userson Facebook than the next 15 social game developers combined. Additionally, asof June 30, 2011, Zynga has more daily average users than the next 30 socialgames combined.
According to Zynga’s October 13, 2011 S
-1 filing, the company has users in 166countries.
The U.S. represents 66% of Zynga’s r
evenues with $343 million for thesix months ended June 30, 2011. No country other than the U.S. exceeded 10% of 
Zynga’s total revenues.
On October 11, 2011, Zynga announced plans to develop
“Project Z,” a platform for playing social games and chatting wit
h friends poweredby Facebook Connect.
Zynga’s relationship with Facebook includes a five
-yearagreement to exclusively use Facebook credits. All covered Zynga games that useFacebook integration must remain exclusive to Facebook for the duration of theagreement, and Zynga is prohibited from releasing new games on an undisclosedlist of other social networks. Zynga is also required to notify Facebook of any newgames at least a week prior to their release. In return Facebook agrees to helpZynga reach certain growth targets for monthly unique users of covered Zyngagames, and to share ad revenues with Zynga.
According to Zynga’s
October 13, 2011 S-1 filing,
the company’s Q2 2011
revenuewas $279.1 million, an increase of 15% from Q2 2010.
Zynga’s a
dvertising revenueincreased $19.5 million or 227% from the six months ended June 30, 2010 to the
 
 2
SEE VERY
IMPORTANT
DISCLAIMERS AT END OF REPORT www.MidasLP.com
 six months ended June 30, 2011. The increase of advertising revenue is due to a $12.2 million increase of in-game offers,sponsorships and engagement ads.
Zynga also disclosed it conducted a “third
-
party” valuatio
n in August 2011 that
assumed a $14.05 billion value for Zynga’s stock.
Contents
Overview ................................................................................................................................................................................. 1Business Model(s) ................................................................................................................................................................... 3Scale ........................................................................................................................................................................................ 4Management Team ................................................................................................................................................................. 5Investors And Valuation .......................................................................................................................................................... 6Summary of Ownership Table (Estimated) ............................................................................................................................. 6Board Of Directors .................................................................................................................................................................. 7Management Equity/Commitment ......................................................................................................................................... 7Selected Acquisitions And M&A Risk Assessment .................................................................................................................. 7Acquisition/Partnership/Investment/Integration Opportunities ........................................................................................... 8Product/Technology/Platform ................................................................................................................................................ 8SWOT Analysis ....................................................................................................................................................................... 10Competitive Analysis ............................................................................................................................................................. 10Industry Growth .................................................................................................................................................................... 11Selected Competitors ............................................................................................................................................................ 12Cursory, Long Term Valuation Thoughts And Valuation Comparables................................................................................. 13Concerns ............................................................................................................................................................................... 14Financial Statements ............................................................................................................................................................. 16MidasLP Accredited Investor Form ....................................................................................................................................... 17

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