Zynga Takes a $95 Million Hit; Stock Falls to New Low

Mashable
Zynga Takes a $95 Million Hit; Stock Falls to New Low
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Zynga's stock price fell 18% in after hours trading 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.

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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."

[More from Mashable: 235 Million People Play Games on Facebook Every Month]

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.

Zynga has faced a tough road since going public last December. The stock never reached its predicted highs and the company reported disappointing results in its first two quarters of 2012.

Since August, a number of high level employees -- including its COO -- have left the company.

This comes in spite of the fact that 235 million people play Facebook games each month.

The company has said it is committed to investing in mobile, as well as expanding its online gambling offerings -- as soon as regulations allow it.

This story originally published on Mashable here.

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