Zynga CEO cashed out for $200M before stock implosion
Though Zynga's stock prices have plummeted since the company's earnings report on Wednesday, CEO Mark Pincus and other insiders managed to reduce their damages from the crash by dumping shares months ago.
Pincus along with other Zynga executives and investors sold a portion of their shares in April, bringing in around $516 million at $12 a share, a couple of dollars above the stock's initial IPO price,according to a report from Daily Ticker.
The company's stock has floated around the $5 mark for a few weeks now, but after Zynga reported disappointing revenues and a third-straight quarter of losses for the April-to-June period yesterday, share prices plunged to a new low of $3.
Of those insiders who sold their stocks early, Pincus made the most and brought in $200 million from the sale, but several others also took home eight-figures. They would have made a lot less if they waited until today to dump their shares like many other investors.
The fortunate timing of their cashouts -- conducted in the same quarter when Zynga's's business appeared to deteriorate to the point that its share prices collapsed once investors were updated on its status -- has raised a few eyebrows.
One law firm, Newman Ferrara, is already conducting an investigation into whether Zynga misrepresented or failed to provide investors information about problems with its social games, such as delayed launches or the company's dependence on Facebook's platform.
Earlier today, analysts expressed doubt that Zynga will be able to continue to dominate the social game space as it has for two years now, commenting "The bottom line is that Zynga over promised and significantly under delivered."