Zynga loses COO as its stock continues to struggle
Shares in the FarmVille and PetVille game maker were down by more than 2% when they closed last night and now stand at $2.95.
Zynga floated on the Nasdaq at $10 a share in December. While it briefly bobbed above its IPO price its stock has been on a downward trajectory since.
The fall in Zynga’s stock has mirrored that of Facebook with which it is so closely associated as the main platform for its games.
Facebook’s stock is trading at a little over $20 down by $18 on its May IPO price indicating an evaporating level of enthusiasm for shares in social media firms.
The departure of gaming veteran Schappert came as no surprise to industry watchers. In a recent management reshuffle he had given up most of his game development duties.
In his place Zynga promoted David Ko, chief mobile officer, and Steve Chiang, executive vice president of games, to oversee game development alongside CEO Mark Pincus.
Zynga did not name a replacement for Schappert who was a big and costly hire for the firm from traditional games publisher EA Games. His package was worth almost $43m last year.
In a statement Pincus, said: “We can confirm that John Schappert has left Zynga and its Board of Directors effective immediately. John has made significant contributions to the games industry throughout his career and we appreciate all that he has done for Zynga. John leaves as a friend of the company and we wish him all the best.”
Reuters reports that Schappert was also named in a lawsuit filed last week by his former employer against Zynga. EA has accused Zynga of copying its ‘The Sims Social’ title.
It alleges that Zynga obtained confidential development information by poaching Schappert on the eve of that game’s launch.
However, Zynga shot back that EA’s lawsuit showed “a lack of understanding of basic copyright principles”.
The departure comes as an anonymous Zynga employee paints a dismal picture of life inside the firm on Quora:
“Our game shipped and performed rather dismally, so the bonuses, raises, promotions and rest we were promised didn’t materialize. With a now completely exhausted team, we were expected to work even harder to improve key metrics. Management would divert blame when these unrealistic metrics could not be hit. Our studio manager, possibly the only person who knew how the company was actually performing on a macro level, quit unexpectedly a few weeks after the IPO.
“But it was all going to be ok, just hang in there, we’d all be rich in a matter of months.
“We were told point blank in one studio-wide meeting that we would IPO “around $20 a share”, and could expect $100 a share within a year if we “launched one or two more successful titles”. A quick analysis of the company fundamentals placed it closer to $10. It now sits at $2.90.”
How does it feel? To spend years being worked into the ground, putting your life on hold and being egged along so top brass can cash out millions at $12 a share while the rank and file employees are in a ‘lockout period’?