Zynga Suffers $52.7 Million Net Loss in Third Quarter 2012

Zynga Suffers $52.7 Million Net Loss in Third Quarter 2012

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Zynga's cost reduction plan involves laying off 150 employees.

Expectations for Facebook social game maker Zynga's third quarter 2012 financial results were dampened when CEO Mark Pincus warned that revenues were down , and now it's official: Zynga lost $52.7 million, net. Bookings, aka revenue due from contracts, and online gaming revenue are both down - bookings by as much as 15% when compared to the previous quarter - and Zynga's cost reduction plan, outlined in the report, involves shedding 150 employees.

The job losses will be part of the labor reductions already seen this month, and represent about 5% of Zynga's work force. The report also mentioned rationalizing its product pipeline and consolidating "certain facilities" as other ways Zynga could save money.

The drastic drop in net revenue was blamed in part on $95.5 million worth of expenses arising from the acquisition of Draw Something creator OMGPOP, as well as $37.8 million stock-based expense related to employee compensation. Zynga expects total stock-based expense for 2012 to be somewhere in the region of $310-325 million.

Speaking of stock, Zynga wants its stock back, and its share repurchase program will be repurchasing up to $200 million worth of common stock. The timing of the repurchase will depend on "market conditions," according to the announcement; as of time of writing, Zynga's stock is trading at $2.129 per share. The IPO price in December 2011 was $10 per share; before the rumblings of discontent earlier this year, it had flirted with $12-15 per.

Source: NASDAQ Globe Newswire

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You'd think these guys would be out of employees by now.

But just like EA and Mario THEY JUST WONT ****** DIE.

This company is disintegrating faster than Republican fiscal policy in direct logic.

Not surprising, Zygna was basically a bubble just waiting to burst.

I'm really starting to think this company is run by Handsome Jack, how else could they piss off so many people and just not die?

The lyrics to this song sums up my opinion about the company (still feel sorry for the poor saps losing their jobs

Especially the bit about thm dying

Actually, the $95 million was them writing off worthless goodwill from the OMGPOP acquisition. Also, the earnings call revealed they still have $1.6 billion in cash on hand. They didn't do great this quarter, but they're not going anywhere.

kajinking:
I'm really starting to think this company is run by Handsome Jack, how else could they piss off so many people and just not die?

Well maybe, Mark Pincus is a bit like Handsome Jack minus the handsome and charisma. Good riddance, it's hopefully in irreversible decline. Here's an article which goes in depth about its failures.

This is the best bit:

In the five years since, the gamers got smarter, too. The most popular games are still pretty simple, but mid-core games like strategy simulator War Commander are gaining steam. Some people who used to be content clicking FarmVille crops have moved on to more complicated games.

vansau:
Actually, the $95 million was them writing off worthless goodwill from the OMGPOP acquisition. Also, the earnings call revealed they still have $1.6 billion in cash on hand. They didn't do great this quarter, but they're not going anywhere.

Surely that's there EA-defence fund?

OT: Meh. As has been stated, they aren't going anywhere just yet. They're like cockroaches.

 

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