Another Zynga Exec Quits
Things are not looking up for publicly-traded social media companies, which will almost certainly discourage other firms (Twitter) from going public in the near future. In the most recent round of bad news, Zynga has lost yet another top executive, with the resignation of chief marketing officer Jeff Karp, while Pandora has suffered a brutal stock slide following news that Apple may launch a competing digital radio business, and Facebook’s stock price remains in the doldrums.
Karp’s resignation from Zynga follows a series of other high-profile departures, which, it is probably safe to assume given the company’s misfortunes, were not entirely voluntarily. In August alone the casualties included chief creative officer Mike Verdu, chief operating officer John Schappert, and several important vice-presidents with responsibility for marketing and production. The list leaves little doubt where the company’s troubles lie: it’s under financial pressure in part because of the need to keep churning out engaging games, which attract new players but also cost money to develop. At the time of writing, Zynga’s stock was trading at $2.83, down from $2.95 earlier this month and $14.69 in March of this year. Who ever thought making games could be so stressful?
Pandora is also taking it on the chin, as investors fled the stock following news that Apple is planning on launching its own digital radio service. While some stock market movements are irrational stampedes, this time the panic was probably justified, considering that Apple -- the world’s biggest company by valuation, with a war chest of $100 billion -- can install its competing service on every single device it sells, and update earlier devices without much trouble. Pandora’s stock price plunged from a high of $12.57 on September 6 to $9.73 at the time of writing.
Then there’s Facebook, which doesn’t have any fresh bad news to bemoan (that I’m aware of, at least) but whose stock continues to languish under the $20 mark. At the time of writing it was trading at $19.41, or just about half of its IPO price of $38. Whether the stock price rallies depends in large part on Facebook’s plans for monetizing its growing number of mobile users, which so far remain mysterious.