The Guys Who Did Words With Friends Could Have Made A Fortune On Zynga

Paul and David Bettner, Newtoy cofounders

Photo: Newtoy

Paul and David Bettner just left Zynga, in a blow to the troubled social-games company’s mobile ambitions.They were the guys who built Words With Friends. Few know just how much money selling that game to Zynga garnered them.

The purchase price of their company, Newtoy, has been widely reported as $53 million, based on disclosures in Zynga’s filings with the Securities and Exchange Commission—$9 million in stock and $44 million in cash.

But as of the end of last year, the Bettners owned far more of Zynga—a little more than 1 per cent of the company apiece.

In 2010, Zynga issued a large number of shares as Series Z convertible preferred stock in connection with acquisitions, according to the company’s IPO prospectus. Zynga made several acquisitions that year, and the company did not specify how the Series Z shares were divvied up.

It appears that the Bettners got the lion’s share of the Series Z stock issued. (Those shares converted to common stock when Zynga went public.)

As a result, the Bettners together held about 2.2 per cent of the company after its IPO.

At its peak, on paper, that stake was worth about $230 million.

We don’t know if they sold any shares in the intervening time. For their sake, we hope they did.

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