Zynga Ride Continues With Acquisition Of Mobile Gaming Company And More Layoffs

 

Zynga sees surge after news of acquisition and layoffs and earnings release.

Logo - Zynga

Zynga acquires NaturalMotion

Logo - NaturalMotion
NaturalMotion acquired by Zynga

Yesterday, Zynga announced that it had acquired NaturalMotion, a creator of mobile games and animation software. Zynga will pay $391 million in cash and 39.8 million shares of Zynga’s Class A Common Stock for NaturalMotion. Approximately 11.6 million of the shares will be issued to continuing employees, subject to certain vesting conditions over a three-year period. All of this is subject to extremely intricate legalese that I won’t bore you with.

To the delight of its stock analysts and new formerly NaturalMotion employees, Zynga also announced a reduction in force of approximately 314 employees, constituting approximately 15% of its workforce. Zynga will incur up to $18.5 million in total restructuring expenses as a result. It feels like only six months ago when we last discussed a Zynga downsizing.

Zynga also issued its 4Q and year end financial results. Let’s get crazy:

Date

Revenue*

Change from Previous Year*

 

Stock Price Day After Release

12/31/12

 

 

 

 

Fiscal Quarter

311,165

(72)

flat

$2.99

Fiscal Year

1,281,267

141,167

12.4%

583,862,093 shares outstanding**

 

 

 

 

$1.7 billion

12/13/13

 

 

 

 

Fiscal Quarter

176,362

(134,803)

(43.3%)

$4.40

Fiscal Year

873,266

(408,001)

(31.8%)

659,687,109 shares outstanding**

       

$2.9 billion

____________
*Dollars in thousands.
**Based on immediately preceding Form 10-Q

Umm, so a company with 30% less revenue in 2013 than 2012 is worth 40% more after announcing 2013 results than it was after announcing 2012 results?

Was there a silver lining? We suppose only losing $37 million in 2013 versus $209 million in 2012 is a good sign. That plus a Hail Mary acquisition and more layoffs equals a 23.6% pop in the stock price.

 

 

 

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