Zynga‘s stock
price fell 19% in after-hours trading — to a new low of $2.27 per share —
after the company announced some brutal preliminary financial results
for Q3 2012.
The company also updated its outlook for 2012, lowering its guidance
for its projected bookings and adjusted earnings before interest, taxes,
depreciation and amortization.For Q3 2012, the company expects to report a net loss of between $90 million and $105 million and and a diluted EPS (earnings per share) between $0.12 and $0.14.As bad as that is what really stuck out to us is that Zynga will be
taking an impairment charge between $85 million and $95 million “related
to the intangible assets previously acquired in connection with the
company’s purchase of OMGPOP.”In other words, the company will be taking an impairment charge for nearly half of the $180 million it paid for the Draw Something creator just six months ago.In a post to the Zynga blog, CEO and founder Mark Pincus addressed the results, writing:“The challenges we faced in our web business in Q2 continued in Q3 and
while many of our games achieved plan, we still experienced overall
weakness in the invest and express category.”
That blog post, it turns out, was actually sent to all employees
earlier today. Zynga says that its goal is to be “as transparently as
possible on the details on the announcement,” which is why they shared
the internal note alongside the preliminary results.
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