This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Zynga COO Departure Is Red Flag

Stocks in this article: ZNGA

NEW YORK ( TheStreet) -- Mark Pincus has been around for a long time. He was working on Wall Street in the late 90s. He saw the dot-com bubble grow and then burst.

He's also been a Silicon Valley insider for over a decade. He has been growing Zynga (ZNGA - Get Report) as its founder for five years now and was an early investor in Facebook (FB).

So what happened to cause Zynga COO John Schappert, a former top executive from Electronic Arts (EA), to quit the company after less than 18 months?

Observers heralded his arrival as a sign that Zynga was the hot new company in gaming and that it had figured out to successfully mix social networking with gaming. Electronic Arts was portrayed as yesterday's news.

It was obvious obvious that something was going on last week when news emerged that Zynga had stripped product reporting duties from Schappert.

When Zynga released financial results to analysts a couple of weeks ago, along with news that it was cutting its guidance for the remainder of 2012, its shares plummeted 40%.

Clearly, Pincus blamed Schappert in part for the results, and it appears that Schappert decided he'd had enough of the new-fangled way of doing gaming at Zynga.

If this was an isolated incident at Zynga, you could brush it aside and say that perhaps Pincus just did a bad job of hiring Schappert. It must have been a "bad fit" between Schappert and the Zynga culture. No harm, no foul.

However, other high-profile executives have left Zynga not long after being hired. The most notable one prior to Schappert was Owen Van Natta, who had worked under Jeff Bezos at Amazon.com (AMZN) before joining Facebook in its early days and rising to become Zuckerberg's No. 2 executive before he left.

After leaving Facebook, Van Natta was courted agressively for several plum jobs, including a position at Microsoft (MSFT). However, he chose to wait and eventually landed at Zynga as the company was gearing up for its IPO.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs