Social games firm Zynga recorded one of the day’s biggest Nasdaq losses on Wednesday, as shares plummeted %17.7 after a disappointing debut quarterly financial report.
Since its December IPO, Zynga’s stock price had climbed 43 per cent to $14.35, but fell to $11.80 in a single day of trading.
The share crash came one day after Zynga announced increased revenues for the quarter, yet a huge stock-based compensation pay-out to employees meant resulted in a $435 million net loss.
The Farmville creator projected bookings of about $1.4 billion for 2012, which would represent year-over-year growth of about 20 per cent. Last year bookings climbed nearly double that, leading some investors to believe growth will continue to slow.
In a move to calm investors, company COO John Schappert claimed that Zynga’s success will be long-term.
"That’s why we still have the six-most played games on Facebook,” Reuters quoted him as saying.
Despite the losses, Zynga has support of analyst such as Robert Baird & Co, which in a research note said “while growth has slowed for both Facebook and Zynga, long-term secular shifts in content consumption, along with significant growth opportunities on smart devices from Apple and Google are too compelling to ignore."