Zynga founder, other insiders to sell 43M shares
(AP) -- Zynga's CEO and other insiders at the online games company plan to sell 43 million shares of stock in a public offering that will boost the amount of stock available for general trading by 35 percent.
Class B stock owned by Mark Pincus and others will be converted to regular, Class A shares. All shares have the same ownership value, but Class B stock has seven times the voting power.
Pincus, who founded Zynga Inc. in 2007, will control about 35 percent of the company once the offering is complete. That's down only slightly from 36.5 percent because he will retain his Class C shares, which have 70 times the voting power of Class A stock.
Zynga, which had its initial public offering of stock in December, disclosed the latest plans in a regulatory filing Friday and said proceeds from the sale will go to the individuals, not the company.
Zynga is the maker of online games such as "CityVille," "FarmVille and "Zynga Poker." Many of the games are played on Facebook, though Zynga has been working on expanding to other areas, notably mobile devices. "Words With Friends," a Scrabble-like game played mainly on smartphones, is one of its best-known titles.
The move announced Friday was expected. Last week, the company said Zynga shareholders may sell some shares, just three months after the company went public, to try to avoid a drop in its stock price. The number of shares wasn't disclosed at the time.
Early investors typically must wait about six months after an IPO to sell off parts of their stakes. By selling some shares now, shareholders won't be flooding the market all at once in June when the post-IPO "lock-up" is scheduled to expire. A mass wave of selling can drive down the stock price.
Zynga's stock fell 36 cents, or 2.6 percent, to close Friday at $13.40. At that price, the 43 million shares will be worth about $576 million. Pincus is offering 16.5 million shares, worth about $221 million. The stock has increased 34 percent since its IPO price of $10.
Zynga also disclosed that it had spent $180 million to buy OMGPop, maker of the popular mobile game "Draw Something." The company didn't disclose the price when it announced the deal on Wednesday.
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