Shares for the online game-maker Zynga were down more than 20 percent on Thursday, an all-time low at $2.82 in afterhours trading, after reports of expected third-quarter losses, and projected revenue losses for the year.
Though the expectation is for net losses of 12 to 14 cents a share for the quarter ending September 30, according to FactSet, analysts on average expect break-even earnings on revenue of $286.7 million, said the Associated Press.
The San Francisco-based network of gaming applications was established in 2007 by Mark Pincus and named after his late bulldog, who, in turn was named after an African warrior queen, according to the company’s website.
Zynga just went public in May, selling for $10 a share.
The company said its losses are caused by weak demand for some of its games, the Associated Press reported, adding that it also expects to lose about half of the $183 million it paid to acquire Omgpop in March. At the time Omgpop’s Draw Something game was a big revenue maker but it lost popularity soon after Zynga’s purchase.
An article in Thursday’s TechCrunch attributes the decline in value of the company to a number of factors including: the popularity of mobile devices; a 30 percent cut Facebook began taking on Farmville virtual sales beginning in July 2011 (Farmville is played on Facebook); and adjustments to the frequency with which Farmville messages show up on the streams of Facebook users who aren’t interested in them.
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