Zynga Under Investigation After Stocks Plummet
By Joseph Christ on July 28th, 2012 (10 comments)
You better make sure your crops are watered and your pigs are fed, because things are looking fairly dire for Farmville creator Zynga.
Zynga stock has fallen nearly 40% over the past few weeks, and they have recently posted a net loss of $22.6 million dollars for the second quarter of 2012. That would all be bad enough if it wasn't for news reports that a number of Zynga insiders had sold off large amounts of stock three months before the fatal crash we are seeing now. Some of those who suspiciously dumped the stock are CEO Mark Pincus who sold roughly $200 million worth of stock in April, and then there is Zynga's CFO, COO, and General Counsel all following suit for a total combined 43 million shares sold for a payout of $516 million.
This is what's known as possible insider trading, and it's extremely illegal.
Now, multiple law firms are investigating Zynga and looking closely at these stock sales under the suspicion that the company failed to disclose, or even hid, "materially adverse facts" from its investors.
According to Kotaku the firms currently investigating Zynga are "Schubert Jonckheer & Kolbe, Newman Ferrara, Johnson & Weaver, Wohl & Fruchter, and Levi & Korsinsky." Some of the accusations being made are whether CEO Mark Pincus had insider knowledge that the crash was coming before the trades were made, and "concerns that Zynga misrepresented and/or failed to disclose materially adverse facts about its business and financial condition."
This represents just the latest in the current fall of a giant who once stood tall as social gaming started to make its way into popularity. If Zynga experiences a dramatic demise, especially one that includes people being shuffled off to prison, it'll be interesting to see how this effects the market as a whole. And those who thought that social gaming was nothing more than a paper tiger might have some hard evidence to state their case.
Joseph Christ
Joseph Christ is the Reviews Editor and a Podcast Personality at 4Player. Specializing in reviews, editorials, drinking, and saying inappropriate things about gaming franchises that are beloved by millions, his satirical and sometimes edgy style offsets a more serious and penetrating substance lurking below the surface. He is also the host of the Cocktail Time Podcast. You'll follow his Twitter if you know what's good for you.
|
Follow Us
|
Back to the Top
|
|
|
© 2012 4Player Network All rights reserved |
Log in or sign up |
EA's stock has also been going to shit for several months now. Wonderful.
Link / ReplySo the shady company Zynga, is doing shady stuff. Surprise, surprise.
Link / Replythank goodness
Link / Replythe week after the launch of facebook's IPO told me to pull out ASAP. The climax of the whole zynga thing was the acquisition of Draw Something...and after that it was like the fall of the roman empire. My major question was who was foolish enough to feel their money would be safely invested in facebook/zynga?
Link / ReplyRIP shady company Zynga. You won't be missed.
Link / ReplyNo more Farmville? My cousins are going to be heartbroken. Me... not so much.
Link / ReplyHa yuck! gosh darn economee goin two shitt, now I wheel lose mah FARM?
Link / ReplyI guess I feel bad for the people who may lose their jobs but other then that no skin off my back.
Link / ReplyAren't CEOs literally copy and paste from corporation to corporation?
Link / ReplyThank God. Hopefully Farmville will go away and my mom will stop wasting time on it. I tried playing cityville or some shit like it and I was thoroughly unimpressed. Talk about an extremely boring and monotonous game.
Link / ReplyNew Comment