Former employee takes action over broken lock-up
Social gamemaker Zynga has been sued by a shareholder and former employee over claims that some of its executives were allowed to cash out early despite the 165 day lockup period.
Zynga launched its IPO in December of 2011, but purchasers weren't allowed to sell their stock until the end of the lockup.
This apparently was waived for some executives, who allegedly sold stock for some $200 million in March.
The plaintiff, Wendy Lee, is a former product manager for Zynga and tells Bloomberg that by selling early these executives "nearly doubled the proceeds from their sales.”
Court documents state that Lee bought 30,000 shares for $3.805 each, selling them at $3.15.
Acting on behalf of non-executive shareholders, Lee is asking the court that the executives pay damages.
With Zynga's rapid decline last year to a low of $2.09 after a fifteen dollar high, it's not surprising that some are upset by the company's decision.
Zynga is slowly crawling back up in value, and company founder Mark Pincus has cut his salary to $1 from the $1.68 million he reportedly made in 2011 to cut costs.
Zynga currently sits at $3.39 on the NASDAQ, which has fallen over the past month by about twenty points.