Another Executive Jumps Zynga’s Sinking Ship

Shares of Zynga (NASDAQ:ZNGA) have pretty much been crashing since March. Mainly catalyzed by second-quarter earnings per share of $0.01, which missed expectations by $0.05,, and revenue of $332.5 million, which missed by $11.6 million, shares have been trading below $3 since the end of July. CEO Mark Pincus sold 15 percent of his shares in early April, triggering concern.

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Now, following a stream of resignations, CTO Allan Leinwand is leaving the company. Zynga, which is heavily dependent on Facebook (NASDAQ:FB), has been pushing for infrastructure independence. Leinwand was a key player behind Zynga’s internally developed Z-cloud, an effort to shift away from Amazon’s (NASDAQ:AMZN) cloud service.

A flood of Zynga resumes into the job market doesn’t forecast well for the social gaming company. Although Zynga still claims more than 306 million users, there is a trend towards decreased activity and engagement with its products. Having attracted games from third-party developers like Sava Transmedia, RocketPlay, and Majesco Entertainment, the company may maintain a critical mass of users despite concerns. Success will hinge on Zynga’s ability to get players to engage for longer and spend money on digital goods.

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