Zynga Loses 74% of Stock Value This Year
Zynga, publisher of many Facebook games such as Farmville, has had a rough year. It was revealed that Zynga’s stock was the second poorest performing stock in 2012 among larger companies, which the market caps at over $1 billion. Groupon is the only other company that’s worse. While every other major U.S. company’s stock did well and / or increased this year, Zynga stock lost 74% of its value in 2012 and there’s still three more months left in the year.
Zynga used to be the lead company of the wildly successful casual gaming market and was once valued at $9 billion but according to the LA Times, its stock has sunk below the value of the cash it has on hand, the securities it owns, and the amount it paid in March for its headquarters in San Francisco. Currently, Zynga’s stock is at $2.35, which essentially means that the company is worth nothing whatsoever and it still has time to sink even lower than that this year alone.
Analysits are predicting layoffs at the company although Zynga has not announce any such plans. What Zynga has said in a recent financial statement is quote, ”The outlook for [the fourth quarter] is significantly lower than our expectations, which assumed some growth from newer titles launched this summer… We expect fundamentals to remain weak over the next few quarters as the company faces several headwinds.” The company also has announced that it is taking a write-down of $85 million to $95 million on its acquisition of “Draw Something” game maker OMGPOP in March for $180 million.
The casual market has proven to be very finicky. Facebook games such as YoVille, Farmville, and Song Pop may be successful for a time but their success isn’t long lasting. However, that doesn’t mean they can’t be fun. Do you like social games? What do you think about the fall of Zynga? Comment below and let us know.