) plunged 9.17% ($0.30) to close at $2.97 on June 5, 2014 following
cautious comments from its Chief Executive Officer (CEO), Don
Mattrick about the company's future growth prospects.
In a recent conference, Zynga's CEO failed to give any visibility
on the company's profit earning potential. Zynga has reported loss
the last four quarters. Moreover, he also declined to provide any
details on the long term outlook and remained tight-lipped about
the future product pipeline of the company.
Since Don Mattrick became the CEO of Zynga three high-profile
senior executives left the organization. Also, earlier this year in
April, 2014 the Chief Product Officer (CPO) Mark Pincus, exited his
services from all operational duties at Zynga. Pincus had led the
company to fame and glory so his exit is considered to be a huge
blow for the company.
However, Zynga remained tight-lipped regarding the reason for the
exit of these senior executives. The pessimistic approach of the
CEO coupled with the news of the exit of the senior management has
shaken the confidence of the investors to a great extent.
Zynga has had a rough time since it went public at the end of 2011,
including multiple rounds of layoffs, ill-considered acquisitions,
and a soured relationship with
In 2011, Zynga debuted at $10.00 but now trades at $2.97. The
decline in share price can be attributed to its failure to respond
to a market shift towards games played on smartphones. The company
has been trying to boost its competitive position in the mobile
gaming segment through the launch of mobile games for
) iOS platform.
Although, increased competition from the likes of
) remain a major headwind going forward yet we believe that Zynga's
innovative product pipeline and its dominant position in the social
and gaming sector will help it in achieving robust growth in the
Currently, Zynga has a Zacks Rank # 3 (Hold).
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