News

Zynga Bosses Bailed Out Before Crash

| 27 Jul 2012 14:57
image

Well-timed stock divestment made Zynga insiders a killing.

In a sudden reversal of fortune, Zynga's stock has gone from $12 per share to a $3 per share. However not everyone came out of this catastrophe unhappy. Several important shareholders - among them Zynga's CEO, CFO, COO and General Counsel - walked away with millions while ordinary shareholders lost their shirts.

Zynga General Counsel Reginald Davis was the one who got the least, at $3.8 million. That pales in comparison to CEO Mark Pincus' $200 million for his 16.5 million share holding. Other Zynga insiders - Google, SilverLake Partners, Reid Hoffman the PayPal guru who later joined Zynga's board of directors - sold at the same time the Zynga board did, which raises the unpleasant possibility of insider trading.

At least one market analyst, Richard Greenfield of BTIG, regrets recommending Zynga as a buy to his customers. "Right now," Greenfield said, "everything is going wrong for Zynga. In a rapidly changing Internet landscape that is moving to mobile, it's very hard to have confidence these issues are temporary."

Zynga has blamed Facebook, a duff edition of Mafia Wars 2, softening repeat customer numbers and a mistimed purchase of Draw Something owner OMGPOP for its current financial troubles. It's worth noting that the senior staff still hold Zynga stock, so it's not as if they've lost nothing by Zynga's stock price drop. That said, $200 million is a pretty comfortable cushion in times of financial strife.

Source: Yahoo, Gamasutra

RELATED CONTENT
Comments on