Published on July 25th, 2012 | by Andre Gamble, Contributor0
Zynga Points Fingers as Stock Prices Fall 41 Percent [UPDATED]
Zynga, arguably the most popular mobile and Facebook game developer, has had a hard time since their stocks started trading December of 2011. After Facebook went public on May 18, Zynga stocks closed, which at the time was an all time low of $7.16 a share. A month later their stock would fall below $5 a share.
As of closing today, Zynga has fallen 41 percent and their share price now rests at a paltry $2.99 a share.
At Mashable, Zynga claims that Facebook’s handling of games as the main reason their stock has taken a hit in the past couple of months, as well as “reduced expectations for Draw Something.” For example, new games are more favored over older titles. The competition on Facebook is tough, but a lack of innovation may be Zynga’s real problem. Zynga has been more focused on buying up or just copying their competitions games than creating new ideas themselves.
No matter the reason for Zynga’s most recent slide, the company is in trouble not only on Wall Street but also with the public. The past two years have seen one controversy after another from ex-employees telling tales of Zynga sanctioned copying of other games to negative company culture–as said by ex-Zynga employee of CEO Mark Pincus: “I don’t f***ing want innovation, just copy your competitors.” (source)
This maybe the end of one of the most popular casual game developers.
[update]: According to Yahoo News, a group of Zynga insiders including CEO Mark Pincus, the CFO, the COO and the General Counsel sold 43 million shares of Zynga stock back in April for a reported total of $516 million. At the moment Zynga stock has risen to $3.17 a share, and CEO Mark Pincus still owns 67.7 million shares.