Zynga Seeks Surrender of Shares Post IPO

Zynga’s, the online game company, CEO Mark Pincus is leaning on some of its employees to surrender company shares which they own ahead of the company’s IPO of shares, according to a report published on Thursday.

Mark Pincus, who earlier on gave the shares to his employees to retain top talent, is now feeling a bit of remorse over his own decision. This is because some of the employees who were hired earlier did not contribute as much compared to the employees that were hired later on. However, they received more shares because they were early onboard during the starting stages of Zynga.

The online game company which offers games like Cityville, Zynga, Poker and Framville are mostly played on the popular networking site Facebook. The company though has filed for an initial public offering but yet has not disclosed how much it plans to raise out of this IPO.

Zynga is among the several other tech companies that have either had initial public offerings or are planning to have soon. Facebook is expected to have an IPO in 2012 and Groupon Inc. (NASDAQ:GRPN) had its IPO last week, wherein it received great response. Gropuon Inc. had its IPO on November 4^th and the Chicago based company gained 31 percent in the IPO.

It is becoming a trend in the Silicon Valley culture to get a hot start initially and then reaping the rewards following a sale or an IPO. The guarantee of a good payout is what gets a lot of employees working for longer hours and shedding extra sweat in a startup’s life with some early compensation.

However, the journal said that Picus wanted employees to continue contributing to the company even when it grew big rather than just wait to cash in. Zynga refused to comment on the matter because the company before its initial public offerings is in a federally authorized silence period, which is expected to happen by the end of this year. Zynga, San Francisco based tech group, currently has strength of about 3,000 employees.

Depending on the stocks options Zynga wants back are whether vested or unvested the company might get indulge into legal trouble over the issue. In Zynga’s case, the demands to surrender the shares only applied to shares that not been vested yet.

If an employee resigns from the company before the shares options vest, they lose it. Vested shares have a fixed value and can be sold.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.