Zynga stock implodes following Q2 report
Wednesday, 25th July 2012 at 11:24 pm
Share prices down 40 per cent in after hours trading
Zynga has fallen foul of investors as a poor showing in Q2 has resulted in a 40 percent share price collapse in after hours trading.
Though the company has reported healthy growth in both users and year-on-year bookings, these figures fell short of estimates, resulting in a net loss of $22.8 million.
"Our games reached record audiences, achieving over 300 million monthly active users, said company head Mark Pincus.
"We grew our mobile footprint five-fold in the year to 33 million daily active users making Zynga the largest mobile gaming network.”
But with earnings at $332.5 million compared with the forecast of $344.12 million, shareholders were unconvinced.
The news drove stocks down to an all-time low of $3.03 a share after close.
“We also faced new short-term challenges which led to a sequential decline in bookings," said Pincus.
"Despite this, we’re optimistic about the long-term growth prospects on mobile where we have a window of opportunity to drive the same kind of social gaming revolution that we enabled on the web.”
The transition to mobile has not been easy on Zynga, who is having significant difficulties in monetizing its vast army of smartphone and tablet users.
The poor showing has led the company to revise its estimate for 2012, with bookings now forecast to be between $1.15 and $1.225 billion.
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