Zynga, the company that made it possible for all those people you call friends to attacked your Facebook wall with goddamned Farmville requests was riding the money train al the way to Banksville. Their habit of copying other games and then profiting from them has made a lot of people angry – but they’ve not really cared – because they’ve been swimming in money. It seems somebody’s just drained their cashpool.
Earlier this week, their stocks took a nosedive after posting a net loss of $22.8 million. Investors and people foolish enough to buy Zynga stock have been selling left, right and centre. The company, once with stock trading prices hovering at around $14 a share, now has its stock valued at just a shade over $3.
Here’s the interesting bit. We’ve always considered Zynga to be a tad scaly – given the way that they’ve straight out ripped off other games and made oodles of cash from their clones – but here’s something a little more incriminating. Weeks before announcing their most recent losses, several Zynga higher ups unloaded stocks (when they were valued at $12 a share). Those include CEO Marc Pincus, COO John Schappert and and CFO David Wehner, who won’t be among the many investors and traders who’ve seen their investments shed 80% of their value in a single year.
They’re in the clear, right now, of insider trading – because each has only sold a “a fraction of their holdings,” so they’ve still lost a lot of money – but probably kept just enough for champagne on their yachts. Zynga recently acquired OMGPOP , makers of Draw Something for way too much money. About 3 seconds after that purchase, just about every single human being on earth who was playing the game, stopped.
Last Updated: July 27, 2012