Zynga CEO tightens reigns on IPO with 70 times more voting power

Zynga CEO Mark Pincus (pictured) likes his four-year-old company just the way it is, and he's going to keep it that way. Bloomberg reports that the FarmVille creator's board has approved a new stock structure with three levels of voting power. More specifically, the change grants Pincus 70 votes per share he owns, 10 votes per share for early investors and just 1 vote for whomever buys shares once the company opens itself up to the market.

This effectively gives Pincus the final say in where the company goes during future shareholder meetings. And that's even with the tiny 16 percent of the company he owns (though, is the largest share). Lise Buyer, principal at Portola Valley, Calif.-based IPO advisory firm Class V Group, told Bloomberg that the unprecedented move may be to keep too much voting power from early shareholding employees. (Very sneaky, sis.)

"Maybe there are so many early employees that even 10-to-1 would put the ultimate decision power in the hands of too large a group of employees or investors," she told Bloomberg. Current shareholders must agree to the change by Sept. 2 and, if approved, the new structure--which even massive, publicly-traded companies like Google don't have--would go into effect along with the imminent initial public offering.

"Zynga is holding the trump card here in that they do not need the IPO," research director at New York-based GreenCrest Capital Management LLC Nitsan Hargil told Bloomberg. "This is the kind of company that the market needs more than it needs the market." In other words, the ball is in Zynga's court, and will continue to stay there even after folks like you and I can buy stake in the company. Smooth moves, Zynga.

[Via GamesIndustry.biz]

Would you ever buy stock in Zynga now that you'll have even less of a say in where the company goes? Do you think this change will scare away the big-time investors, too? Sound off in the comments. Add Comment.