Wolf Haldenstein Adler Freeman & Herz LLP today filed a class action lawsuit in the United States District Court, Northern District of California, on behalf of all persons who purchased the common stock of Zynga Inc. (“Zynga” or the “Company”) [NASDAQ:ZNGA] between December 16, 2011 and July 25, 2012, inclusive (the “Class Period”), against the Company and certain of the Company’s officers and directors (“Defendants”), alleging securities fraud pursuant to Sections 10(b) and 20(a) of the Exchange Act [15 U.S.C. §§ 78j(b) and 78t(a)] and Rule 10b-5 promulgated thereunder by the SEC [17 C.F.R. § 240.10b-5] (the “Class”). The case name is Gaines v. Zynga Inc., et al., Civil Action No. 12-cv-4133. A copy of the complaint filed in this action is available from the Court, or can be viewed on the Wolf Haldenstein Adler Freeman & Herz LLP website at www.whafh.com. During the Class Period, Zynga issued materially false and misleading statements and omitted to state material facts that rendered their affirmative statements misleading as they related to the Company’s financial performance, financial condition and internal operational controls. As a result of these materially false and misleading statements, the price of the Company’s securities was artificially inflated during the Class Period. As the truth of the Company’s materially false and misleading statements entered the market, the Company’s stock plummeted. On December 15, 2011, Zynga floated its initial public offering (the “IPO”) of 100,000,000 shares of its Class A common stock at a price to the public of $10 per share on the NASDAQ Global Select Market under the symbol “ZNGA.” An Amended Form S-1 filed December 15, 2011 failed to disclose that agreements with Facebook, which could heavily affect Zynga’s future bookings and revenue stream, were scheduled to expire on April 30, 2012. Pursuant to the Company’s IPO Prospectus filed with the SEC on December 16, 2011, all officers and directors of the Company had entered into lock-up agreements which provided that they would not offer, sell or transfer any shares of common stock beneficially owned by them for 165 days, or until May 28, 2012.
The Complaint alleges that during the Class Period, the Defendants issued false and misleading statements regarding Zynga’s financial results and future outlook. The Complaint further alleges that Defendants ran a “pump and dump” scheme which enabled them to sell over $500 million of the Company’s stock in a secondary offering that allowed the officer and director defendants to sell their shares prior to the May 28, 2012 IPO lock-up date.On July 25, 2012, Zynga issued a press release in connection with its Second Quarter 2012 Financial Results, which were much lower than expected. In the press release, the Company lowered its’ earnings guidance dramatically, after having raised its guidance only one quarter previous. Inexplicably the new outlook was not only below the misleadingly optimistic outlook presented in the April 26, 2012 first quarter earnings press release, but also it was below the guidance provided in the 2011 year end earnings press release published February 28, 2012. The day after the announcement, Zynga stock closed at $3.175 per share, a decline of close to 40% from the previous trading day. This represents a 68% decline from the IPO price only seven months previous to the announcement. More importantly, it represents a 73% discount to the Secondary Offering price of $12, at which Zynga insiders successfully sold over $500 million of their personal Zynga shares. If you purchased Zynga common stock during the Class Period, you may request that the Court appoint you as lead plaintiff by October 1, 2012. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Wolf Haldenstein, or other counsel of your choice, to serve as your counsel in this action.
Wolf Haldenstein has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has approximately 70 attorneys in various practice areas; and offices in Chicago, New York City, and San Diego. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex securities, multi-district and consolidated litigation.If you wish to discuss this action or have any questions, please contact Wolf Haldenstein Adler Freeman & Herz LLP at 270 Madison Avenue, New York, New York 10016, by telephone at (800) 575-0735 (Gregory M. Nespole, Esq., Alan D. Weiss, Esq., or Derek Behnke), via e-mail at email@example.com or visit our website at www.whafh.com. All e-mail correspondence should make reference to Zynga.