Social gaming company Zynga Inc. cut third 2012 forecast after their second quarter expectations fell short of Wall Street’s targets resulting to a 40% stock drop.
Zynga ,who is responsible for games such as Hidden Chronicles and Farmville, also pulled social networking tycoon Facebook down. The latter gets 15% of their earnings from Zynga.
The social gaming brand edited their 2012 earbibgs forecast from 23 to 29 cents initially to 4 to 9 cents. Zynga went public last December and was well on its way to earning top dollars.
Unfortunately, Wall Street has slowly backed down from the company as gaming rivals became more and users began to hop off the Zynga wagon.
According to Arvind Bhatia, analyst from Sterne Agee,“The quarter is a disaster. I think that it’s looking more and more like this was a fad because they’ve introduced so many new games, yet EBITDA continues to come down.”
“The company has been saying for some time that declining traffic doesn’t matter and clearly it does. The decline in some of their top games in terms of traffic has been huge,” he added.
Thomson Reuters also said that Zynga had a quarterly revenue amounting to $332.4 million which is below the average which analyst pegged at $344.12.
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