Zynga Makes Expensive Playmate

With Zynga’s business model losing zing, $9 billion seems too high a valuation for the company. At first glance, Zynga appears to be targeting a market capitalization of roughly $7 billion with its initial public offering.

However, including options the valuation target jumps to $9 billion. That is roughly 7.5 times this year’s revenue. Yes, Zynga is profitable, unlike other tech IPOs. But not hugely — net profit was just $30 million the first nine months of 2011.

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