Zynga Inc (NASDAQ:ZNGA), a free to play games specialist, replicated the result announcement session of last February yesterday, when it had lost more than 15%. This time, it has ended the day with a loss of 17.93% after opening with a huge gap down. The volume obviously exploded to very high levels of nearly 130 million, against the daily average of 22 million only. This meltdown was the result of a kneejerk reaction by a market surprised over the announcement of the CEO Don Mattrick stepping down, from the board of directors too. He will be replaced by Mark Pincus, the founder and former CEO of the company.
Don Mattrick was poached from Microsoft’s interactive entertainment section in 2013, to join Zynga Inc (NASDAQ:ZNGA) with a very handsome salary, including a signing bonus of $5 million and more than $40 million of stock options, to vest over a period of 3-5 years. The new CEO Mark Pincus, owner of about 10% stock and 60% voting rights, has requested to be paid just $1 annually.
“Dawn of Titans”, the new game by Zynga Inc (NASDAQ:ZNGA), garnered positive reviews and its “Hit it Rich” was a top rated IOS game in terms of average daily sales, pushing the stock higher by over 20% in the month of March, negating the bearishness of the previous month to a great extent. In February, the company had reported a sales of $182.4 million against the expected $201.1 million and a roughly break even quarter.
The volatile nature of the stock in the last few months is clearly evident from the chart but more importantly, the perfectly sideways range is clearly defined. The area of $2.10-20 has been providing immense support not only for the last 6 months, but it is the lifetime low of the stock as well, registered in 2012.