Once considered untouchable, social gaming giant, Zynga, seem to be in hot water after declaring a net loss of $22 Million alongside a drop of 40% in its share prices.
Sensing foul play, nosey law firms such as Levi & Korsinsky have begun focusing in on Zynga based on “concerns that Zynga misrepresented and/or failed to disclose materially adverse facts about its business and financial condition”.
This is due to several insiders reportedly selling off their stock before the company’s value began to drop, suggesting that Zynga chose to not disclose facts about the business it should had.
But this isn’t the only issue facing the social gaming giant at the moment. In a call to investors, Zynga cite ‘short term challenges’ going forward’ as well as lowering the companies expectations for the rest of the year due to “delays in launching new games, a faster decline in existing web games due in part to a more challenging environment on the Facebook web platform, and reduced expectations for Draw Something.”
Maybe they shouldn’t have scooped up five-minute hit wonder Draw Something.
What would happen if Zynga were to go under, collapsing in unto itself? What would all those housewives and FaceBook gamers do then?