Zynga Inc (NASDAQ:ZNGA) Undergoes Leadership Changes Will the New Appointment Bear Fruit

Zynga Inc (NASDAQ:ZNGA) has been making changes to its leadership with the founder, Mark Pincus, taking the reins. The change came after the ex-CEO Don Mattrick was abruptly asked to leave. Reports suggest that the change has come due to failure to deliver the expected results. Additionally, Zynga does not have a gaming console in the pipeline yet, which makes it difficult to gain the trust of investors. This is also one of the reasons for the replacement.

If the history of the two CEO’s is to be seen, then Pincus is not the better of the two candidates. While initially serving as the CEO, Pincus, had reached a profitable deal with Facebook. However, once the two companies split, Zynga was the unexpected victim in the scenario. Pincus himself did not have a backup plan for this kind of situation; he had made the company increasingly dependent on Facebook.

Mr. Mattrick on the other hand had tried to make some recovery through the acquisition of NaturalMotion for $527 million. The decision is yet to show signs of any progress and his aggressive issuance of forecasts, which he failed to meet, had led to distrust with the investors. The change was bound to happen, but Pincus was not the expected choice at the moment.

One of the first moves that Mr. Pincus made, after his appointment, was lay-off 18% of the workforce. The new CEO believed that this way he would be saving $100 million.He also announced plans to cut on outside services, while developing plans for moving to mobile games. The company launched its first mobile game, Empires and Allies, recently. The news gave some courage to the investors to buy ZNGA, helping it with the rise. If the current plans are executed properly, they just might bear fruit for the company and also add to Mr. Pincus’s portfolio.

Zynga Inc (NASDAQ:ZNGA) closed at $2.80 after gaining 7.28% on May 7. The company has 770.6 million shares being traded in the market, with a 52-week range of $2.20-$3.81.

 

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Culver Stinson

Culver Stinson

Stinson is US Markets Daily’s Senior Producer for News & Public Affairs.