A new amendment (without June numbers) from Zynga:
sec.gov
Zynga IPO Discloses Accounting Lapse
By Shira Ovide
Wall Street Journal
August 11, 2011, 2:34 PM ET
Zynga is just out with a revised IPO. Here are a few interesting new nuggets:
* Accounting mistake, a relatively minor one: Zynga disclosed it didn’t hew to accounting standards covering estimates of how long people play Zynga’s video games.
“Pursuant to our previous policy, we had applied our then most current estimate of the average playing period for paying players to current period sales but did not adjust the ending balance of deferred revenue for the revised estimates for related sales from prior periods,” Zynga said in its filing.
The restatement results in a relatively minor $7.5 million addition to revenue for the first quarter of this year, and a reduction in deferred revenue by the corresponding $7.5 million. Zynga said it determined the company had a “material weakness in internal control over financial reporting” as of March 31, 2011.
* Very few people pay to play. VERY few. In its initial IPO filing last month, Zynga said a small percentage of people who play its games (for free) will pay to upgrade their FarmVille gardens or spruce up their CityVille virtual houses. In today’s filing, however, Zynga tells us exactly how few people pay: “Historically, less than 5% of our players have been paying players,” Zynga said in the filing.
Zynga also disclosed how reliant it is on its most-popular games, though the reliance is lessening over time. In 2008, Zynga says its top-three games accounted for 93% of online game revenue. In the first quarter of 2011, the top three games accounted for 63% of online-game revenue.
* Where is Yuri Milner? The Russian billionaire invests in seemingly every hot Silicon Valley company, including Zynga and Twitter. But while the first IPO filing showed Milner’s DST Global owned more than 32.8 million shares, the DST investment firm is noticeably absent from the list of Zynga shareholders in today’s filing. We have asked Zynga for a comment.
* The SEC, not a pen pal: Zynga CEO Mark Pincus penned a letter to investors that led off the original IPO filing July 1. Now, that letter is pushed way, way down into the meat of the IPO filing. The same thing happened to a similar investor letter from Groupon CEO Andrew Mason.
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