Zynga is the world's largest social games maker, but has shed almost three-quarters its market value since its IPO.
Mike Hickey, an analyst at National Alliance Securities, who has covered the gaming business for about eight years told Rueters that the executive departures are spreading like wildfire at Zynga and he had not seen anything like it. The company tried to keep its staff after its shares had already slumped a lot. The company said in a regulatory filing that it was setting aside more stock for employee compensation to encourage staff to stick around by replacing under-water stock options with new, lower-priced equity awards.
It did not work and it seems that employees are suffering from a bad case of the dooms. Zynga is also struggling to staunch growing losses of users. It reported a surprise net loss for its second quarter and cut its full-year earnings per share forecast. Shareholders promptly sued the company.
The company said that its poor quarter was the result of sudden changes to Facebook's algorithm and delays in its pipeline of new titles.