In the months preceding its 2011 IPO, some analysts estimated the company to have a market cap of $15 billion to $20 billion. At the last minute, that was dropped to $7 billion. And the company’s shares quickly took a dive after trading commenced. Today, the company’s market cap sits at less than $3 billion.
As the gaming world struggles to comprehend the move by the one-time head of Microsoft’s Xbox division to the CEO’s office of the struggling social and mobile gaming giant, details are coming to light that could explain not only why Mattrick made the move, but that it was a long time coming.
There aren’t a lot of genuine surprises in the video game world these days, but Don Mattrick’s jump from Microsoft to Zynga Monday certainly qualifies as one.
Zynga has been struggling mightily since its debut as a public company, and many people felt Mark Pincus would never relinquish the CEO spot. But will Mattrick taking those reins be enough to turn the company around? And who’s taking over Xbox at Microsoft?
Now, he’s hoping to pull of a similar miracle at Zynga—but it’s a move that has left investors, Microsoft and the gaming world baffled.
All Things D reports Mattrick is close to taking the CEO position at struggling social game maker Zynga. An announcement may come as early as the end of the day.
Wunderlich Securities’ Blake Harper got the ball rolling, noting that while Yahoo! has been reported to be sniffing around Yelp and OpenTable, Zynga (along with Tumblr and FourSquare) would be a good match as well.
Not too long ago, Zynga looked like a video game company that was dabbling in the gambling world. But more and more, it’s looking like the reverse might be true, with the type of gaming most closely associated with Las Vegas and Atlantic City moving to the forefront.
It’s no secret that Zynga’s stock has fallen far below its initial offering price. Lately, though, shares have seen two significant bumps–an 8 percent climb Monday and 10 percent climb on Feb 8. In both circumstances, it was the possible legalization of online gambling that drove the climbs.
So Zynga and Facebook have agreed to see other people — and Wall Street is freaking out about that.
Zynga shares were down 8 percent in early trading Friday after the companies restructured their working agreement. And while those investors certainly have a right to be mad at Zynga in general, I think they might be getting it wrong this time.
In an interview with the Wall Street Journal, Apple director Bill Campbell, who was brought in to advise the social giant’s founder earlier this year as things imploded, says Pincus was “discouraged” and near tears over the state of the company.
Game developers may not be lining up at Zynga’s doors after a cost restructuring that resulted in approximately 150 layoffs earlier this week, but in business terms, are things finally on the upswing?
I’m about to say something that’s likely to make me unpopular around these parts: Zynga may actually know what it’s doing.
I know… I know… But after months of seemingly drifting aimlessly and taking no steps to correct its ongoing free-fall in the markets, the company has made a few intelligent moves this week that have finally turned heads – and it’s done that as its biggest partner has tried to bury it.