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Zynga faces stock drama in run-up to IPO

11 Nov 2011
zynga-ipo

One of the most eagerly anticipated financial events in Silicon Valley is the upcomming initial public offering (IPO) of social gaming firm Zynga.

The success of titles such as FarmVille has made Zynga one of the hottest companies in the business, and the IPO is being watched closely by those hoping for an economic boom in the technology sector.

However, reports suggest that there is some unrest among Zynga's executives over the way the stock is being distributed.

A report in The Wall Street Journal claimed that Zynga bosses have told employees to hand over some of their stock options or face termination. The report said that the company felt it gave some individuals overly generous options and is now looking to reclaim the shares ahead of the IPO.

Zynga then issued its own comment on the matter, accusing the paper of misrepresenting its "meritocracy" system.

"We believe that every employee deserves the same opportunity to lead," Zynga chief executive Mark Pinkus told employees. "It's not about where or when you enter Zynga, it's how far you can grow."

Pinkus more or less concluded that such events will become more common as the company nears the IPO, and seems to take the incident in his stride, which is sensible. If a few employees grumbling to the press about their stock options is enough to rattle a CEO, he'll have no chance when it comes to dealing with shareholders.

As we have seen, things can get much worse when there is a board of directors involved.

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Shaun Nichols
About

Shaun Nichols is the US correspondent for V3.co.uk. He has been with the company since 2006, originally joining as a news intern at the site's San Francisco offices.

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