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Zynga COO stripped of game duties - report
Zynga COO stripped of game duties - report
July 31, 2012 | By Staff

July 31, 2012 | By Staff
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    15 comments
More: Social/Online, Business/Marketing



John Schappert surprised industry watchers in April last year when he said he would be leaving his COO post at Electronic Arts to join the fast-growing FarmVille developer Zynga.

A year and three months later, he's being stripped of his duties overseeing game operations at Zynga, where he's been COO.

Citing sources familiar with the matter, The Wall Street Journal reported Zynga has reorganized senior executives, following recent quarterly results that sent stock spiraling downward. The shuffle means that Schappert will no longer be in charge of the company's games, with chief mobile officer David Ko and executive VP Steve Chiang taking over the duties.

Ko and Chiang were both reporting to Schappert -- now they will report to CEO Mark Pincus.

Putting the mobile chief in charge of games is a message from Zynga. Players have been spending less money when playing Zynga's Facebook games, and the company, even with strong titles like Draw Something and Words With Friends on mobile, needs to do a better job to address consumers' migration from social networks to mobile.

Last week, the company saw revenues of $332.5 million, an increase of 19 percent year over year. But that was coupled with a loss of nearly $23 million and a reduced outlook, causing investors to bail and Zynga's stock to plummet.


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Comments


Ramin Shokrizade
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I don't see Mr. Schappert, Ko, or Chiang as being equiped to deal with the systemic weaknesses in the Zynga business model. Further, I cannot imagine anyone with the knowledge of how to turn Zynga around being hired at Zynga, due to philosophical differences with the CEO. The core issues at hand, none of which have yet to be addressed by anyone in a Zynga leadership position, were described in my "Zynga Analysis" paper over a year ago: http://gameful.org/groups/games-for-change/forum/topic/zynga-anal
ysis/

It is my opinion that their only countermeasures for the problems explained in my analysis have been creative expression of earnings projections, and timely liquidation of executive share holdings.

Curtiss Murphy
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Wow Ramin. That was a fantastic expose on Zynga. /bow.

TC Weidner
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and they are under investigation, and they are likely to be the target of a large class action suit

http://www.slashgear.com/zynga-hit-with-investigation-over-questi
onable-stock-sell-off-27240642/

Multiple law firms have announced that they will be investigating the secondary sale for possible insider stock trading violations. The list of firms includes Schubert Jonckheer & Kolbe, Newman Ferrara, Johnson & Weaver, Wohl & Fruchter, and Levi & Korsinsky.

All these firms are well versed in class action lawsuits and have won billion dollar lawsuits against big corporations. Zynga’s troubles may just be beginning, if any of these firms find any evidence of wrongdoing and lead a class action lawsuit against the social gaming behemoth on behalf of its shareholders.


Read more at http://techie-buzz.com/tech-news/zynga-insider-trading-violations
.html?utm_campaign=network_posts_list#ZLMM54OmFwFWPCEU.99

Matt Mihaly
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Those are all the financial equivalent of ambulance-chasing firms. Any time a stock suffers a large drop, roaches like this come out of the woodwork to start the lawsuits and make themselves millions in legal fees.

Merc Hoffner
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Robbie Bach says Hi!

TC Weidner
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@Matt

not to defend lawyers, but in class action suits pretty sure they have to actually win a settlement in order to get paid, so its not about piling up legal fees for the sake of legal fees. Sure the lawyers are big winners in settle class action suits, but in reality the fear of class action suits are one of the only things holding many companies accountable these days, its why so many are trying there hardest to not allow them anymore.

David Fried
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And game designers everywhere collectively shouted "I told you so!"

Terry Matthes
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I don't think these losses can be attributed to Mr. Schappert.

The Le
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I don't understand. Why is the stock going down if it makes over $300 MILLION in revenue?

Matt Mihaly
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The more salient question is why is the market valuing Zynga at only $2.1 billion when it has $1.5 billion in cash and owns a building worth $300 million. Effectively, the market is currently saying that Zynga's business is thus only worth about $300 million ($2.1b - $1.8b = $300m).

Pretty nuts if you ask me. Buying lots.

Nathan Zufelt
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The entire stock market has been broken since the 2008 collapse. Prices no longer represent actual value and fluctuations in price have more to do with giant hedge funds jumping around to avoid government debt crisis. You're better off betting in Vegas with your retirement funds right now.

TC Weidner
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finish reading that paragraph to find out why.
--------------
But that was coupled with a loss of nearly $23 million and a reduced outlook
------------------
bingo

Merc Hoffner
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If you think that's bad, Nintendo is trading little above book value. And their assets only partly account for the intangible value of their IPs. You know what that says? That the entire market basically thinks that Nintendo has no ability to ever make money again.

Are they high?

Daniel Martinez
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This seems like a desperate attempt to put the brakes on a downward spiral, which pretty much never works.

Steven Ulakovich
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His buyout must be massive if they just did not can him.


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