The CEO Shafted Me, But I'm Still Buying His Stock

NEW YORK (TheStreet) -- I make it a point to not pass judgment on another person's intent.

That's why, even though I grow more angry with him by the day, I continue to give Zynga ( ZNGA) CEO Mark Pincus the benefit of the doubt.

Absent inside information and a line into his recent psychological processes, it's pretty much impossible to know if Pincus acted inappropriately or, even worse, illegally prior to his stock's plunge to sub-$3 territory.

When I watch a so-called dirty hit in hockey, for example, I cringe at the ensuing suspension. Often, it results not from some obvious transgression or a serious injury, but from what sports leagues call "intent to injure." How in the world can a league official know what a player was thinking in the split second when he checked another player into the boards?

They can't. It's just not possible. The subjective game of assigning intent to an athlete or CEO puts the accuser in somewhat dangerous territory.

With that said, it's tough to not haul off and verbally smack Pincus upside the head. Let's review what we have seen from the Zynga CEO over the last several months. Pincus, along with other insiders, sold ZNGA stock at $12 a share prior to the company's lockup expiration, after a first-quarter earnings beat and one day into the second quarter, which would end up being a beyond-disastrous quarter for Zynga.

But here again, unless you're an insider, you do not know what they knew. It's not simply that I refuse to assign intent, but I have a difficult time thinking that people, even big banks, could perpetrate such downright evil.

I'm not sure Zynga executives were acting shady; instead, investors should be more concerned with how incredibly clueless management was as Q1 turned into Q2.

It's easy to get angry, though. Right around this time, Pincus sold two San Francisco homes for $1.9 million and $8.2 million. He then turned around, quite possibly using a chunk of the $200 million he collected in the secondary offering, to pick up a $16 million 11,500-square-foot mansion in Pacific Heights.

The sky was falling. But Pincus was living the dream. He was picking out the perfect bidet, while ZNGA longs, myself included, were about to lose our shirts on his stock.

And it's not like Pincus is Steve Jobs or Jeff Bezos or any hot shot who has walked through a company like Apple ( AAPL) or's ( AMZN) doors.

He's a great visionary, no doubt -- which is why I will keep buying his stock -- but he deserves as much of the blame as anybody else does for Zynga's crash.

As I argued leading up to and right after the implosion, Pincus needs to stay in his office or wherever he does his thinking. Sit under a tree on the San Francisco State campus and think -- for hours. Then go meet with your team behind closed doors and make some magic. Turn Zynga into the social dial tone for gaming you claim it can be. That's what makes me bullish.

Watching Pincus awkwardly stumble his way through an interview or investor presentation is akin to a legal team putting him on the stand to defend himself against insider trading charges. It's corporate suicide.

Hopefully, Pincus and his figurehead Board of Directors understand this.

Hopefully, they blew out their COO -- making the poor guy a scapegoat -- to hire a strong COO who can assume the role of public face for the company, while Pincus fades into the role of CEO by title, chief strategy officer by actual job description.

This is the approach, for all intents and purposes, that Mark Zuckerberg takes at Facebook ( FB), and Reed Hastings should have taken at Netflix ( NFLX).

Bring in a season executive (e.g., Sheryl Sandberg) and let her run the parts of the show you're just not that good at it. It's no sin to drop the ego, cede some control and make the move that's best for the company you founded and desperately want to see succeed.

I know Pincus is a bright dude. He must be thinking along these same lines. For this reason -- and because I don't think he's an evil inside trader -- I am long the stock and will continue to buy it.

ZNGA has first-mover advantage in social gaming. It's well positioned in the space and has well over a billion in cash on the books. And it's making the transition to mobile nicely, even if the rest of the world expects it to happen overnight. The recent sell-off, while understandable, was overdone.

Pincus can prove me right. He just has to take a break from decorating the sixth bedroom in his new house to make the right moves for his company and investors. I'm confident that he will.

At the time of publication, the author was long ZNGA and FB.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

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