Earlier this week, online games publisher Zynga announced very disappointing earnings numbers. So disappointing that a number of law firms want to know what's going on and why the stock has plummeted.
Zynga's initial public offering was back in December, 2011. In April, Zynga conducted a “secondary stock offering” which raised about $516 million. That sale was underwritten by Goldman Sachs, Morgan Stanley, Bank of America and others.
That was nearly four months ago.
Fast forward to this past Wednesday. During their earnings call, Zynga announced losses of nearly $23 million on earnings of $323 million. They said that yearly, per share dividend estimates would now be in the 4-to-9 cent range. Investors were expecting 23-to-29 cents
Zynga blamed a decline in interest in existing games. As you might imagine, during after hours trading the stock's prices plummeted.
According to Henry Blodgett's report on The Daily Ticker there has been a huge sell-off of Zynga stock in recent months. 43 million shares – nearly $500 million worth of Zynga stock. Sold by some of the company's officers, general counsel and some prime investors. The Daily Ticker names names.
On Friday, a "shareholder alert" on Business Wire announced that a number of law firms, on both coasts, have begun looking into “possible violations of federal securities laws and breaches of fiduciary duty.” They're directing Zynga stock holders who want more information to contact Joseph Levi at Levi and Korinsky, LLC's New York offices.