Zynga is crashing after a bad earnings report.
The stock has been on a wild ride after-hours. It dropped hard, then bounced back to be down 2%, then it fell more than 14%, and now it’s down 9%.
It missed expectations and lowered its guidance.
Revenue was $US153 million, a 34% drop year-over-year, versus expectations of $US191 million. It provided Q3 guidance of $US160-$170 million, which is way below analyst expectations of $US212.35 million.
Zynga, which rose to prominence through Facebook gaming lost its edge when mobile gaming took off. CEO Don Mattrick took over a year ago. He’s still knee deep in a turn around project.
In the release, Mattrick said, “We are purposefully competing, and while we would like to be further along, we believe we are making the right decisions to grow our business and unlock long term shareholder value … We continue to make significant investments in the highest potential areas of our future pipeline. By Q4 of this year, approximately half of our game-related research and development will be allocated to new and recently launched games — this represents about a 45% increase year over year.”
The positive news in the release is that Zynga is going to explore sports gaming and has done deals with the NFL and Tiger Woods.
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