The shares of Zynga Inc(NASDAQ:ZNGA) tumbled to another new low in late hours on Wednesday with stock plunged a whopping 37% to $3.20 as the game provider reported much lower than anticipated second quarter earnings and revenue. If, that’s not enough, here is more surprise – The company trimmed its earnings outlook.
Get Complete Analysis on ZNGA, Get Free Trend Analysis
The company which is popular for games like "CityVille" and "FarmVille" said that it lost $22.8 million, or 3 cents a share in the latest quarter, reversing a year ago profits of $1.4 million. On an adjusted basis, the company would have earned a penny, well below analysts’ target of 5 cents a share. Revenue came in at $332 million, up 19% year over year, while missing analysts’ estimates of $342.8 million.
Shares of ZNGA had been severe selling pressure since early March and had lost about 45% as investors are concerned about the company’s reducing users. The company generated its 100% revenue from games played on Facebook’s platform. However, the recent suggest that more users have been shifting their uses to mobile from desktop, which has left limited room for ZNGA to grow.
The company went public in December, 2011 at an IPO price of $10, the stock quickly jumped to new high of $15.91 by early March. Since then, the stock never recovered and showed continuous selling pressure.
Can ZNGA Bounce back After Today’s Fall? Get Trend Analysis
For the full year, the company now projects to earn 4-9 cents a share on revenue range of $1.15 billion-to-$1.23 billion, well below from its prior forecast of 23-29 cents per share on revenue range of $1.43 billion-to-$1.5 billion.
Shares of Facebook Inc(NASDAQ:FB) too came under heavy selling pressure in after hours and tumbled over 4.50% as the company’s ad business is largely dependent on usage of desktop, while ZNGA’s earnings suggest that users might have switched to mobile, which could affect Facebook’s upcoming earnings due late Thursday July 26, 2012.