Report: Zynga Insiders Dumped Lots Of Stock Before It Tanked

Zynga CEO Mark Pincus dumped $US200 million worth of stock this past April, three months before his company's stock suddenly tanked last night, according to a new report.

According to Yahoo News, Pincus sold $US200 million worth of stock back in April, just when the year's second financial quarter had begun. Other investors and executives, including Zynga's CFO, COO, and General Counsel, also sold millions worth of stock. Yahoo says they sold 43 million shares of stock at $US12 a share for a total of $US516 million.

Zynga's stock is currently trading for $3.17 a share. According to Forbes, Pincus still owns about 67.7 million shares in the company.

Zynga, best known as the company behind games like Words with Friends and FarmVille, blamed yesterday's sudden stock drop on new Facebook notifications that downplay old games as well as the failure of Draw Something, which the company purchased earlier this year for $US210 million. Zynga stock dropped 41% after the market closed last night.

I've reached out to Zynga for comment and will update should they respond.

[Yahoo]


Comments

    Lol and all the geeks claiming F2P would take over, even the fucking owners of Zynga know their company wont last.

    Wow, what a amazing coincidence. They are so lucky they sold their stock. If you invested in this company you deserve to lose your money, go by a lottery ticket for better odds.

    is anyone really surprised that a bunch of fad online games stopped being popular after a certain amount of time?

    I've never really touched the stock market so don't know the ins and outs of share trading, but if these folks on the board sold their stock in the lead-up to a poor earnings report (presumably they knew the numbers before everyone else) wouldn't that be illegal?

      I probably is, but it would be easy for them to show many arguements from around then that people outside the company were making to say it wouldn't last.

      its not illegal because they did it during a period they are allowed to sell. Board members can sell just after results come out so as the quarter begins they are allowed to sell.

      They predicted a bad quarter and sold. Nothing illegal there under the current rules. Any shareholder worth their salt keeps an eye the holdings of the board members. When board members are selling, YOU sell.

    This sounds very dodgy. I expect there will be an investigation by SEC Into these transaction as this sounds like insider trading. They basically dumped stock knowing it was about to go down in value. So much corruption going on these days. Small investors have got no chance in my opinion. The game is rigged

    It certainly does sound like insider trading to me - maybe there were internal issues at the company which made the writing on the wall clear for those with access to them. But when the CEO has very little confidence in his own company and dumps a significant amount of stock, that's certainly not good news for the company.
    When I read about Zynga's value after they went public I thought "Surely not ..." And thought the same thing once I saw their pricey acquisition of the Words with Friends guys. It seems like the dotcom crash of the 90's - people rushing to invest in an idea which has little to no substance, then bailing out as soon as things get rough. Meanwhile, the small-time investors get screwed because they don't have the same level of access to real information regarding the state of the invested companies.

    Who ever thought the interest in Zynga would last should feel stupid right now.

    Zynga games are a fad.

    I don't feel sorry for them, I feel sorry for the people who were bought out by them to work for them.

    Mark Pincus has always been a money hungry douchebag. His start was funded on getting everyone addicted to a shitty yet addictive game.

    Difference now is they're hooked, he's rich, but wants to be RICHER. So he fucks over the stock market and leftover shareholders.

    Only change is he's now a douchebag of epic proportions.

      His start was dirtier than that. Have you ever heard his rant about the time he tried his own product, including the Zwinky malwarebar he signed on to?

    There's no evidence of insider trading. Three months is a long time in the software industry.

    Zynga games suck, and they're obviously fads (online services platforms seem to be faddish), but just because many (including myself) dislike their product does not mean that Zynga have necessarily done anything illegal.

    Remember that businesspeople are just as entitled to the presumption of innocence as anyone else.

    Insider trading is a possibility, absolutely. But this report alone is no evidence of it.

    Charlie Chaplin thought talkies were a fad. Many in Hollywood thought TV would be a fad.

    Just because the established industry looks down on a new product, does not mean it will not last and make a lot of people a lot of money. The ridiculous overestimation of worth of the likes of Zynga, just makes it easier for naysayers to overlook the fact that they provide a greater return on investment than most games developed for "legitimate" platforms. For better or worse, social network gaming is here for the long haul.

    Lights, camera... Microtransaction.

    Draw Something lost popularity because from the moment Zynga acquired it, they neglected it. All it would have taken was periodic additions to the word list, or heck, even just the word list in the premium edition. Instead what users got were buggy updates that added little more than corporate splash screens and regular crashes.

    The final nail in Draw Something's coffin came with an update about a month ago that suddenly required the game to have access to, and to harvest your private phonebook data without any sort of explanation. Most people I know stopped updating the software at that point, and refused to pay another cent to the company. I still to this day question the legality of collecting such data in Australia.

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