Zynga Inc., (NASDAQ: ZNGA) Shares Dip After It Announces Its Quarter Earnings
Denver, CO, 07/29/2013 (Avauncer.com) – Shares of Zynga Inc., (NASDAQ: ZNGA) plummeted as much as 14% to close at $3.01 in its last trading session. This was only midway its 52-week price range of $2.09 to $4.03. However, shares were heavily traded with 80.41 million shares exchanging hands, up from the average volume of 22.30 million shares.
This was on the back of company announcing its disappointing second quarter earnings. This followed after CEO Mark Pincus stepped aside to allow Microsoft Corporation (NASDAQ:MSFT)’s Don A. Mattrick to take over the troubled game maker. Daily active users of the company too approximately halved as compared to previous year.
The company, in a new strategy to make money, planned to roll out real money casino style games, which were however slashed down by U.S. regulations. However, the company has not dropped the plan altogether, and is considering possibilities of overseas launch of the game. Also, apart from legislative barriers, the company had itself dropped plans to acquire Spooky Cool Labs, the game maker that is into real money gaming experience. Zynga is on a massive cost cutting mission, cutting 500 jobs along with closing several offices in this quarter itself. However, the company may now focus on developing better free to play games, which is expected to attract more users, thereby increasing its user base and finally its revenue.
The company has also in recent pass tried to create a platform of its own, with a login id independent of Facebook Inc., (NASDAQ:FB). The company has to give a cut of its revenue to the social network giant, as a charge for the platform it uses. However, its initiative did not receive a positive response, which is evident of the fact that the fate of the company is closely tied to Facebook.
The CEO of the company had recently accepted the failure of the company, admitting that the company has witnessed revenue loss and shrinking user base, despite delivering a better than expected performance in its recent quarter.