Why Zynga Got Destroyed
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of social gamer Zynga (NAS: ZNGA) are getting destroyed today, down by as much as 41% today after the company reported a weak second quarter.
So what: Revenue came in at $332 million, turning into an adjusted profit of just a penny by the time it reached the bottom line. Analysts were looking for more up top and down below, calling for $343.1 million in sales and $0.06 per share in profit. On a GAAP basis, the company lost $22.8 million, or $0.03 per share.
Now what: Bookings fell 8% sequentially to $302 million as the company saw declines in player engagement on its Web games. It also cited changes in Facebook's (NAS: FB) platform that hurt its exposure, instead driving users toward newer games. Draw Something also continues to underperform relative to what Zynga expected (and paid) for it. No wonder Zynga is so anxious to expand its mobile presence and potentially dip into the real money of the international gaming market.
Interested in more info on Zynga? Add it to your watchlist byclicking here.
The article Why Zynga Got Destroyed originally appeared on Fool.com.Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Facebook. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.