Check this crap out. Between all the stories of him strongarming his workers, and now him gaming his own company to enrich himself by ripping the company off, this is the exact kind of CEO that gives all those idiot protesters valid talking points. Selling his shares back to the company @ $14 a share when the thing couldn't even hold it's IPO price on the 1st day.
For many technology entrepreneurs, an initial public offering is a chance to make their paper millions real. Zynga Inc. chief Mark Pincus is part of a growing group of start-up founders who beat the IPO to the punch.
Mr. Pincus, 45 years old, took more than $109 million off the table when he sold a small portion of his stake back to the social games company in March, according to regulatory filings.
Mr. Pincus even made a bigger profit than he would have in Zynga's IPO. The San Francisco-based company spent nearly $14 a share to buy back Mr. Pincus's stock, compared with an IPO price of $10 a share that values Zynga at about $8.9 billion, including stock options.
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A Zynga spokeswoman declined to comment.
Tech-company entrepreneurs selling stock before a public offering isn't new. Months prior to taking his online-software company public in 2004, for example, Salesforce Chief Executive Marc Benioff also sold some of his shares in his firm to investors.
[See how Zynga is trading now]
What's different in Silicon Valley today is the size of some of these sales. Almost a year before daily deals site Groupon Inc. went public in November, co-founders Eric Lefkofsky and Bradley Keywell sold about $300 million and $133 million of stock to investors, respectively, while CEO Andrew Mason sold $10 million of stock.
Through representatives, Messrs. Keywell, Lefkofsky and Mason declined comment.
Last year, Facebook Inc. CEO Mark Zuckerberg pledged $100 million of his company's stock to the Newark, N.J., school system, though it's unclear if he ever sold any of his shares back to the company or to investors. A Facebook spokesman declined to comment.
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The outsized sales reflect how some of the most sought-after tech start-ups are reaping multi-billion valuations before they go public. "Very few companies got to that scale before they went public so these opportunities didn't exist" before, said Charles Beeler, a venture capitalist at El Dorado Ventures, which isn't an investor in Zynga.
Mr. Beeler said while he's seeing more entrepreneurs take out money before an IPO, he has rarely seen founders cash out hundreds of millions of dollars.
The size of these pre-IPO sales by founders has caused consternation. "I'm old-fashioned," said Lise Buyer, a Silicon Valley-based IPO consultant. "I don't think it's appropriate for founders to take out massive amounts ahead of early investors or ahead of the success that is demonstrated by an IPO."
Still, some argue the practice shows that shares of a company are in high demand. "It's a good problem to have if the company you've invested in has an entrepreneur that could take $100 million off the table while it's still a private business," Mr. Beeler said. He adds that entrepreneurs also should be financially diversified instead of concentrating their wealth in a company.
For Mr. Pincus, the March sale was for just a tiny portion of his Zynga stake and his wealth remains tied to the company. According to filings, the entrepreneur sold 7.8 million shares in March and now owns more than 112 million shares, or 16% of Zynga. As of Thursday's pricing, that stake was worth $1.12 billion, not including stock options.
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Mr. Pincus, a serial Silicon Valley entrepreneur, has sold shares in a start-up prior to its IPO before. In 1999, he exercised options for 500,000 shares of Support.com Inc.—a software company he founded—at a value of $5.5 million, according to regulatory filings.
It's unclear from the filing when and for what price Mr. Pincus sold the shares, and who bought them. Support.com went public in 2000 at $29 a share; it was trading at less than $2 a share this week.
Mr. Pincus has had a mix of start-up hits and disappointments since. After Support.com, Mr. Pincus founded social network Tribe Networks Inc., which flopped. He founded Zynga in 2007.
The home is now on the market for $8.9 million. Another three-bedroom San Francisco home the couple owns is now also on the market for $2.2 million.
When Mr. Pincus sold shares back to Zynga in March, most of his employees were prohibited from selling their shares. Zynga that same month bought shares back from investors including several venture-capital funds.
According to filings, Zynga received a third-party valuation of $14 billion in the first half of 2011, which was the basis for Mr. Pincus' sale. The company once sought a valuation as high as $20 billlion, people familiar with the matter have said, but that figure came down by half after a summer market swoon that saw a number of IPOs sink in value.
[See also: How Zynga Became a $9 Billion Company]
None of the investors made close to Mr. Pincus's $109 million. The next biggest March buyback was from venture firm Foundry Group for about $22.5 million, according to SEC filings.
In a filing this month, Zynga said current and former employees other than Mr. Pincus have sold a total of 51.2 million shares for between 25 cents and $17.09 a share. The company didn't disclose how many shares were sold at $17.09, who sold them, or when they were sold. It did say that in 2010, 298 employees participated in tender offers in which they sold shares to third parties.
Mr. Pincus has spent some of his wealth in recent years on real estate. The Wall Street Journal earlier reported that in 2009, he and his wife Ali, co-founder of home décor flash sales site One Kings Lane Inc., bought a 6,000-square-foot six-bedroom home in San Francisco's posh Presidio Heights neighborhood for $8.1 million through a limited liability company