Zynga Falls as China Games Head Tian Leaves: San Francisc
Zynga Inc. (ZNGA), the largest maker of games played on social networks, dropped more than 5 percent for a second-straight trading day after it said Andy Tian, who headed its Beijing game studio, is leaving the company.
The shares fell 6.8 percent to $2.53 at 12:41 p.m. in New York, and earlier touched $2.50 for the lowest price since Jan. 28. The stock had climbed 15 percent this year through June 21, compared with a 12 percent gain for the Russell 1000 Index.
Tian will be succeeded by John Yin, who joined Zynga last year from Electronic Arts Inc. (EA), the company said. The executive changes were first reported by the Wall Street Journal.
Zynga earlier this month said it’s trimming 18 percent of the workforce to cut costs as game players shift from titles on Facebook Inc. (FB), the San Francisco-based company’s core business, to applications played on mobile devices. More than a half-dozen other senior executives have left Zynga in recent months, as a falling stock price erodes the value of equity used to compensate staff. The shares have tumbled about 75 percent since its December 2011 market debut.
Scott Devitt, an analyst at Morgan Stanley, last week downgraded the stock and said the social-games maker may need to trim more staff to make up for user declines.
A year ago, Zynga looked to expand its presence in China by hiring engineers and striking a partnership with Sina Corp.’s Weibo, a microblogging service with more than 300 million registered users.
Zynga’s revenue fell 18 percent in the first quarter, and analysts predict it will keep dropping for four more earnings periods, according to data compiled by Bloomberg.
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