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   Technology StocksZynga, Inc.

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From: Glenn Petersen2/12/2015 5:26:14 PM
   of 364
ZNGA disappoints.

The press release:

Zynga (ZNGA) Stock Plummets in After-Hours Trading Today on Revenue Miss, Lower Guidance

BY Sebastian Silva
02/12/15 - 04:38 PM EST

NEW YORK ( TheStreet) -- Shares of Zynga ( ZNGA - Get Report) are plummeting in after-hours trading today, down 11.65% to $2.35, after the company reported fourth quarter revenue that missed analysts' estimates, and guidance that was below expectations.

For the fourth quarter, the San Francisco-based social games company broke even on earnings and reported revenue of $193 million. Analysts polled by Reuters expected the company to break even on earnings and report revenue of $201.11 million.

For the full year, the company met expectations of a net loss of 1 cent per share, while revenue of $690 million missed full year estimates of $711.93 million.

Guidance for the 2015 first quarter was lower than expected. Zynga now expects a net loss of 3 cents to 2 cents per share and revenue in the range of $155 million to $165 million. Reuters estimates were looking for the company to break even again on earnings and have revenue of $200.87 million. Zynga also announced the closure of its Zynga China studio, which will affect all 71 employees in the Beijing-based studio and result in an annualized cost savings of $7 million. Separately, TheStreet Ratings team rates ZYNGA INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation: "We rate ZYNGA INC (ZNGA) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and disappointing return on equity."

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From: Glenn Petersen3/27/2015 12:40:41 AM
1 Recommendation   of 364
Zynga must face U.S. lawsuit alleging fraud tied to IPO

By Jonathan Stempel
Thu Mar 26, 2015 1:37pm EDT

The Zynga headquarters is pictured in San Francisco, California April 23, 2014. The social games services provider is scheduled to report first quarter earnings.
Reuters/Robert Galbraith

Reuters) - Zynga Inc must face a lawsuit that accuses the gaming company known for its "FarmVille" game of defrauding shareholders about its prospects before and after its December 2011 initial public offering.

Ruling 13 months after dismissing an earlier version of the lawsuit, U.S. District Judge Jeffrey White in San Francisco said on Wednesday that shareholders could pursue claims that Zynga concealed declining user activity, masked how changes in a Facebook Inc platform for its games would affect demand and inflated its 2012 revenue forecast.

Zynga's market value slid by several billion dollars between March 2, 2012, when its share price peaked at $15.91, and July 26, 2012, when the price dropped below $3 after the company posted disappointing earnings and cut its outlook.

The lawsuit was based in part on at least a half-dozen confidential witnesses, and White said their testimony supported the claim that Zynga management intended to commit fraud.

"Plaintiff alleges that the officers at Zynga obsessively tracked bookings and game-operating metrics on an ongoing, real-time basis with regular updates on the activity and purchases by every user of every Zynga game," White wrote. "Confidential witnesses all corroborate that the updates on game users and spending data was readily accessible to Zynga's management."

White rejected a claim over Zynga's alleged product launch delays, saying it was mere "business puffery" for the company to call its game pipeline "strong," "robust" and "very healthy."

Shareholders led by David Fee also claimed that Zynga hid its weaknesses to enable insiders to sell $593 million of stock before a post-IPO lockup was to expire, and avoid a roughly 75 percent drop in its share price over the next four months.

Zynga had priced its IPO at $10 per share on Dec. 15, 2011.

Kelly Pakula Kunz, a Zynga spokeswoman, on Thursday said the San Francisco-based company had no comment on White's decision.

Nicole Lavallee, a partner at Berman DeValerio representing shareholders, said she was gratified by the decision.

Zynga's share price has been below $5 for more than a year owing to a failure to develop games as popular as "FarmVille," as well as the rise of mobile gaming rivals such as Dublin-based King Digital Entertainment Plc, maker of "Candy Crush Saga."

Zynga shares were down 1.44 percent at $2.73 in afternoon trading on Nasdaq.

The case is In re: Zynga Inc Securities Litigation, U.S. District Court, Northern District of California, No. 12-04007.

(Reporting by Jonathan Stempel in New York, editing by G Crosse)

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To: Glenn Petersen who wrote (326)3/27/2015 9:26:38 AM
From: The Ox
   of 364
What company going into an IPO doesn't talk up the positives?

I guess if they are truly seeing weakness across the board and fail to share this with their investors, then that's a big black eye.

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To: The Ox who wrote (327)4/8/2015 5:44:59 PM
From: Glenn Petersen
1 Recommendation   of 364
Unless it is the SEC of the DOJ, it is hard for me to get too agitated about the retrospective claims of the ambulance chasers.

ZYNA is down 10% in after hours trading on the news that Mark Pincus is returning as CEO:

Mark Pincus, Zynga’s Founder, Returns as C.E.O.

New York Times
APRIL 8, 2015

Mark Pincus at the media and technology conference in Sun Valley, Idaho, in 2013. Credit Andrew Gombert/European Pressphoto Agency

When Mark Pincus hired a new executive to run Zynga, the online games company he founded, he tweeted a message calling the executive, Don Mattrick, an “Internet treasure.”

Now, less than two years later, Zynga’s Internet treasure has left the company, and Mr. Pincus has returned as chief executive.

The departure of Mr. Mattrick as chief executive was not altogether surprising to many in the industry, since a long-running turnaround plan that he set in motion at Zynga had yet to take flight. The return of Mr. Pincus to the top job, though, was unexpected since he had seemed to have largely disengaged from the business of running Zynga, best known for early Facebook games like Zynga Poker and FarmVille.

The abrupt change in leadership was another setback for a company that was once poised to be a leader in a new era of games and the Internet. Other Internet darlings of the same era, such as Groupon, have also faded after their growth fizzled and profits proved elusive

The changes were effective immediately, the company said. In a statement, Mr. Mattrick said he would return to Canada, where is he from.

“I believe the timing is now right for me to leave as C.E.O. and let Mark lead the company into its next chapter, given his passion for the founding vision and his ability to couple our mobile progress with Zynga’s unique strengths,” Mr. Mattrick said.

In an interview, Mr. Pincus said that the company did not fire Mr. Mattrick, but that the two agreed it was time for Mr. Pincus to return to the chief executive job.

“Don and I share a deep commitment to this company achieving its potential,” Mr. Pincus said, and added that he would continue to receive guidance and coaching from Mr. Mattrick.

Founded in 2007, Zynga, based in San Francisco, was among the first companies to bring free-to-play games to a mass audience in the United States. That approach to the business, pioneered by companies in Asia, opened games up to huge new online audiences, a small portion of whom spent money on virtual currency and other goods that enhanced their game experiences.

For a time, Zynga’s growth sent tremors throughout the games business, as it siphoned talent from established companies like Electronic Arts.

Quickly though, Zynga found itself disrupted by technology changes. It initially found success by publishing its games on Facebook, as the social network was taking off. But with the advent of the iPhone in 2007 and other smartphones, momentum in the business quickly shifted to mobile games.

While Facebook, too, struggled at first with the rise of mobile, it eventually adapted to the changes and now has thriving business from smartphones. Zynga has not made the leap as effectively.

Word of Mr. Pincus’s return was puzzling to some and suggested that the transition was sudden. Mr. Pincus has not been a visible presence in Zynga’s offices over the past year, though he occasionally emailed staff with his thoughts about Zynga games, according to one Zynga employee, who asked for anonymity because the company’s internal communications are confidential.

While he had left daily operations, Mr. Pincus still wielded tremendous influence over the company through a share structure that gave him 63 percent of the voting power of its outstanding capital stock, as of the end of last year.

Mr. Mattrick, a longtime Electronic Arts executive who later ran Microsoft’s Xbox business, reoriented the company toward mobile and reduced its reliance on Facebook. Still, 51 percent of the company’s revenue last year came from Facebook games, according to company filings.

Games are a hit-driven business, and Zynga titles in recent years were never able to capture the cachet of games from mobile-centered companies, like Candy Crush Saga from and Clash of Clans by Supercell.

The company’s finances continued to worsen under Mr. Mattrick. Revenue last year was $690 million, down from $1.28 billion in 2012, the year before Mr. Mattrick took over. The company’s net loss rose to $226 million last year from $209 million in 2012.

As growth slowed at Zynga, and the tech job market around it in San Francisco boomed, the company has struggled to hold onto talent. At the end of last year, about 42 percent of the company had been with Zynga for less than a year and 55 percent for less than two years. “We have experienced significant turnover in our head count over the last year, which has placed and will continue to place significant demands on our management and our operational, financial and technological infrastructure,” the company said in a filing.

Last year, the company botched the introduction of a new Zynga Poker game for mobile. Use and revenue declined from the previous game, which Zynga was then forced to bring back.

Investors have lost interest in the company. Its stock is almost unchanged since the day before Mr. Mattrick joined.

In February, Richard Greenfield, a media and Internet analyst at BTIG Research, published a report highly critical of Mr. Mattrick’s leadership, titled “Zynga Needs a New Leader — Time for Don Mattrick to Go.”

With Mr. Pincus’s return, the company is likely to reinstate his data-driven approach to creating games, focusing on metrics about how and why people are playing Zynga’s games, and using that information to tweak production.

That is in sharp contrast to the approach of Mr. Mattrick, who has typically been less focused on analytics and has championed game quality over all.

“We need to get back to being the leader in mobile data and analytics, which leads to the best product management in our games,” Mr. Pincus said. “I think I bring a DNA and passion, in that respect.”

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To: Glenn Petersen who wrote (328)4/8/2015 5:57:11 PM
From: The Ox
1 Recommendation   of 364
Many moons ago, in the early 80s, I was involved with a custom software company that wrote code for anything from a Wang to a IBM PC and many other systems in between. We were all young and full of beans, as the saying goes, so we hired a guy (literally) from IBM to come in and "take us to the next level".

HUGE mistake. Basically, this guy was worthless to a young startup company. He cost us salary, time and other intangibles that became an albatross around the neck of this vibrant young entity. In essence, trying to "do the right thing" by bringing in what we thought was "high end talent", this guy did nothing to aid in our advancement. He actually helped drive the company into the ground.

I was fortunate to be the main programmer, so I was able to walk away with all my clients after the company folded. I did very well as a consultant going forward but we were on the ground floor of the IBM/MSFT pc revolution and we were writing code for small business systems. That area absolutely exploded over the next few years. I was fortunate to reap a great benefit but it's always an afterthought about what could have been had this clown been more in tuned to what this small, flourishing company needed to help it grow!!!

There are way too many stories like this one....

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To: The Ox who wrote (329)4/10/2015 7:57:39 PM
From: Glenn Petersen
1 Recommendation   of 364
I had a similar experience in the mid 80s. I was the CFO of a network oriented (Novell) microcomputer distributor with a product line that was continually being turned over because of technological advances. The environment was one a barely controlled chaos and the company needed a leader capable of turning on a dime. The CEO, who was a part time presence, recruited a friend for the position of President who had had a high level position with a semi-conductor distributor. A completely different world. The President never adapted to the pace and took so long to make decisions that it seriously hurt the company. His biggest mistake was trying to take a sales staff that was barely civilized and turn them into the button-down drones that he was used to managing. The owner eventually terminated both the President and the CEO.

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From: Glenn Petersen5/6/2015 6:36:01 PM
   of 364
Zynga Narrows Focus, Will Cut 18 Percent of Staff

By Kara Swisher,
Apr 8, 2015, 1:05 PM PDT

Those categories are Action-Strategy (such as Empires and Allies, a new game launched yesterday), Social Casino (Hit It Rich), Invest & Express (FarmVille), Casual (Words With Friends) and Racing (CSR Racing).

The layoffs will finish within the next three quarters, according to a company press release, and are expected to save $45 million every year. Zynga expects to cut $55 million in other costs by the third quarter of 2016, but will take on restructuring charges of between $18 million and $22 million in the current quarter.

Zynga also came in ahead of Wall Street’s earnings expectations in the fiscal quarter that ended in March, reporting a net loss of $6.7 million, or one cent per share, on $167 million in sales. The Street was expecting a loss of two cents per share on sales of $148 million.

In an interview with Re/code, Pincus said the layoffs are aimed at “de-layering and de-cluttering the organization” and have come from corporate and central services, rather than game development. However, the company will exit the sports genre it entered last year and close the Orlando studio that developed the fantasy football-esque game NFL Showdown.

“We identified a couple places where we want to be world-class, like data analytics,” Pincus said. “But in other places — we will let Amazon manage our data centers, for instance.”

Mobile now accounts for 63 percent of Zynga’s revenue, continuing a trend that started last quarter; the company previously said it hoped to get that number to 75 percent in the current fiscal year.

Pincus said some games such as Zynga Poker and FarmVille still have “significant” daily active users on the Web, but that moving forward, the strategy for all games is “mobile first or mobile-also.” He pointed to the success of the Hit It Rich slots games amid several other casino game options as a model for attracting players to new releases.

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From: Glenn Petersen5/8/2015 10:06:23 AM
   of 364
For Zynga, a Journey from the Cloud to Home — and Back Again

By Robert McMillan
Wall Street Journal
9:17 am ET, May 8, 2015

In 2009, Zynga ZNGA +0.71% was a marquee customer for 's AMZN +1.41% cloud-computing services. Two years later, it spent $100 million to build its own data centers to handle the bulk of its computing. Now Zynga’s cloud cruise has come full circle.

The company Wednesday said it would shut its data centers and shift its computing workload back to Amazon, as part of $100 million in spending reductions.

“There’s a lot of places that are not strategic for us to have scale and we think not appropriate, like running our own data centers,” Zynga CEO Mark Pincus told investors on a conference call. “We’re going to let Amazon do that.”

Why the change? Well, Zynga’s business changed. The company grew fast as a maker of popular Web-based Facebook FB +0.22% apps, but stumbled as the world moved to mobile games.

“Their business didn’t grow the way they expected,” said Lydia Leong, an analyst with industry research firm Gartner. “Games were unpredictable,” she said, making it hard to plan computing needs.

Meanwhile, Amazon changed too. The company has famously slashed its cloud computing prices, and today offers companies like Zynga more flexibility to tap the right amount of computing power and storage, Leong said.

Even after Zynga built its data centers in 2011, it still relied on Amazon for some tasks. That required the company to create software for the data centers, called zCloud, which made it easier to switch between Amazon’s servers and its own. The zCloud was based on open-source software called CloudStack, Leong said.

Zynga declined to comment for this article.

Amazon rivals Microsoft MSFT +2.36% and IBM sa IBM +1.13%y they offer customers an easier way to create such “hybrid” clouds, mixing customer-owned computers and a cloud provider. But Gartner’s Leong says customers can accomplish the same tasks using Amazon’s cloud without much additional effort.

When Zynga built the data centers, it bet that it could operate them more cheaply than paying Amazon. But squeezing better price performance out of a city block of servers turned out to be a tricky proposition.

Zynga may have simply decided that it wanted to be a gaming company, not a technology company, said David Moser, the chief technology officer of Zenovia Digital Exchange, an advertising-technology vendor that recently shifted much of its computing power from Amazon to its own data centers.

“Running a data center is expensive,” he said. “There are lots of mouths to feed when you have your own data center.”

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From: Glenn Petersen8/26/2015 5:42:02 PM
   of 364
The perils and challenges of mobile gaming:

Rovio To Cut 260 Jobs As The Angry Birds Franchise Becomes Irrelevant

by Romain Dillet ( @romaindillet)
August 26,2015

It looks like Angry Birds maker Rovio is having some troubles to pay the bills. The Finnish company is about to cut 260 jobs after reducing its workforce by 110 employees in October 2014. At the end of 2013, the company had 800 employees in total.

This news comes as a surprise as Rovio’s latest game is a big success. Angry Birds 2 has been downloaded nearly 50 million times in just a month, topping the charts
  • In the U.S. (at least for a couple of weeks), one of the main App Store markets:
  • In China where the franchise is very successful:
    • In many other countries:

    But generating millions of downloads is just part of the challenge. Angry Birds 2 is already falling in the charts around the world, and its freemium model doesn’t seem to be working great. In the U.S., Angry Birds 2 managed to reach the 42nd spot in the top grossing category shortly after its launch. While this is no small feat, it is nowhere near Game of War (#1), Clash of Clans (#2), Candy Crush Saga (#4) and Candy Crush Soda Saga (#7) — these games have been trusting the top grossing charts for months.

    In other words, Angry Birds 2 is probably not enough to pay hundreds of employees. Rovio has offices in Espoo, Stockholm, London, New York, Los Angeles, Vancouver, Shanghai, Seoul and Tokyo — this isn’t your average indie game development shop.

    The Angry Birds franchise has been one of the first breakthrough gaming successes on the App Store and Play Store. Millions of people paid a few dollars to download the latest iteration in the franchise. Yet, it’s a brand new world for mobile gaming. Now it’s all about free-to-play games, micro transactions and waiting times. Angry Birds wasn’t designed for this model.

    Rovio also has a strong merchandise business — the company has been licensing its brands to sell a ton of Angry Birds teddy bears, notebooks and pens. But as the game franchise becomes less popular, these items could become irrelevant as well.

    There is one last hope for Rovio — The Angry Birds Movie. The company has been working on a movie for a while now, expecting to release it in May 2016. Rovio said that the job cuts will affect the entire organization, except the teams working on the movie in the U.S. and Canada. Focusing the company’s budget and energy on this movie is a big bet, and it will determine the fate of the gaming company.

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    From: Glenn Petersen2/23/2016 4:59:36 PM
       of 364
    Zynga puts its San Francisco headquarters up for sale

    Dean Takahashi
    February 23, 2016 11:24 AM

    Above: Zynga headquarters.

    Image Credit: Zynga

    Zynga has put its San Francisco headquarters up for sale, confirming a report today from the San Francisco blog SFist.

    The social mobile game company’s headcount is down around 2,300 or so, significantly down from its peak above 3,500 people. That means it doesn’t need as much space as it once did. Zynga acquired the space, which was once the U.S. headquarters of Sega, for $228 million. Now it maybe worth much more, given the boom in San Francisco real estate.

    Zynga confirmed the headquarters is up for sale, noting it said so during its fourth quarter conference call. GamesBeat didn’t actually notice that. It plans to sell the building and then take out a long-term lease. Right now, the move is in the exploratory phase. If the company sells, it plans to lease back so employees can stay in the building.

    Founded in 2007, Zynga grew dramatically on the popularity of its Facebook games. It went public at a $9 billion valuation at the end of 2011, but then it faltered. The company had a hard time getting its footing in mobile games, and its audience on Facebook’s desktop platform started to decline.

    Mark Pincus, the chief executive and the company’s founder, brought in former Electronic Arts and Microsoft Xbox executive Don Mattrick to help turn things around. Mattrick cleaned house on the management team and acquired NaturalMotion for $527 million, but he found the turnaround task to be a tough one. He left in April 2015, and Pincus returned to the CEO job.

    For the past three quarters, Zynga has been paring back and reporting breakeven results. Its market value is around $1.9 billion today, as investors have become patient for the turnaround. But Zynga doesn’t necessarily need any cash, as it has more than $900 million on its balance sheet already.

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