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Zynga slumps 16% on sales forecast, BTIG calls for CEO to resign
[LOS ANGELES] Zynga tumbled the most in 2 1/2 years after projecting revenue that trailed Wall Street estimates, leading a BTIG analyst to call for the game maker's chief executive officer to step down Zynga slumped 16 per cent to US$2.24 at the close in New York, the biggest drop since July 2012.
While the shares declind in late trading Thursday after the revenue forecast, they extended their slide today after Richard Greenfield, an analyst at BTIG, said CEO Don Mattrick should resign because he's abandoned the plan he laid out when he took over.
Mr Mattrick, a former Microsoft executive who became CEO in July 2013, "appears to be all over the place," Mr Greenfield said in a note. He's made mistakes including not enough testing and rushing new game introductions, similar to errors made by ex-CEO Mark Pincus, Mr Greenfield said.
Kelly Pakula Kunz, a spokeswoman for San Francisco-based Zynga, declined to comment.
Mr Mattrick has been working to recharge revenue growth at the game developer, where the stock has tumbled more than 70 per cent since an IPO in 2011. Zynga, once the leader in games played on Facebook, said Thursday that revenue in the first quarter would be a maximum of US$165 million, missing the US$195.2 million average of analysts' estimates compiled by Bloomberg.
Meanwhile, rival game maker King Digital Entertainment surged 13 per cent Friday after sales of titles other than Candy Crush Saga increased from the previous quarter, signaling the company is diversifying from its top-selling title.
Zynga and King have struggled to build on their marquee hits and prove that they're not one-hit wonders. While Zynga has made headway moving its titles to smartphones and tablets, progress is taking longer than expected, according to Michael Pachter, an analyst at Wedbush Securities in Los Angeles.