Zynga revving up for IPO road show?

Social gaming company reportedly planning mid-December initial public offering


And, as Bloomberg points out, "That number has ranged between 91 percent and 94 percent since the beginning of last year."

Zynga is working on reducing its dependence on Facebook by producing more mobile games and games geared for other platforms, but even it concedes, "If we are unable to maintain a good relationship with Facebook, our business will suffer."

At this point, that'd be putting it mildly.

There are other risks, which I noted shortly after Zynga filed its IPO plans on July 1. There's the company's dependence on a small number of games for revenue. Another is its heavy dependence on get-a-lifers. "A small percentage of our players account for nearly all of our revenue," Zynga wrote in its initial S-1 filing.

One way Groupon and Zynga are similar is that upper management for each company has come under post-filing scrutiny from analysts and the media. In Groupon's case, CEO Andrew Mason and other executives were criticized for arguably violating the Securities and Exchange Commission's "quiet period" rules, raising questions about their judgment. Those kinds of concerns about management can unnerve investors.

And Zynga CEO Mark Pincus early this month was criticized (by myself, among others) after the Wall Street Journal wrote:

Early last year, as Mr. Pincus began preparing to take Zynga public, he and several other executives decided the company had doled out too many stock rights to certain people in its early days, say people familiar with the matter. The executives chose an unusual solution: They began demanding that certain employees surrender some shares or be fired.

None of which bothers Wall Street in the slightest, trust me. In fact, along with stories about its "ruthless" and "uncompromising" work culture, reports of such hardball tactics in Zynga's executive offices should only whet the appetite of your typical Wall Street 1%er.

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