- Getty Images File Photo
- Barking mad: Zynga, headquartered in San Francisco, lowered its financial forecast earlier this year, prompting a shareholder lawsuit.
Zynga Inc.’s chief marketing officer resigned Monday, becoming the latest senior executive to depart the struggling social-gaming company behind popular Facebook games such as “FarmVille.”
Jeff Karp joins Chief Operating Officer John Schappert and Chief Creative Officer Mike Verdu among the top executives who have quit since August.
The world’s largest maker of online social games, which has shed almost three-quarters of its market value since a much-heralded debut in December, did not cite a reason for Karp’s departure in a filing with the Securities and Exchange Commission on Monday.
“Executive departures are spreading like wildfire at Zynga,” said Mike Hickey, an analyst at National Alliance Securities, who has covered the gaming business for about eight years. “I don’t think I’ve ever seen anything like this.”
In August, when shares for San Francisco-based Zynga had already slumped, the company said in a regulatory filing that it was setting aside more stock for employee compensation. The move was likely designed to encourage staff to stick around by replacing underwater stock options with new, lower-priced equity awards. However, departures have continued in recent weeks.
“When you have turnover with the stock already down that suggests a sense of hopelessness within a portion of the employee base,” Hickey said. “I don’t think business is great. If people were optimistic about future growth, and their compensation is tied to new, lower-priced equity, generally, they don’t leave.”
Zynga, which is struggling to stanch growing losses of users, was one of several consumer Internet companies that listed on stock markets to much fanfare in late 2011.
Daily-deals purveyor Groupon Inc. has lost almost four-fifths of its value since its own initial public offering, which was marred by questions about its accounting practices. On Monday, it named Brian Stevens as its new chief accounting officer.
In July, Zynga reported a net loss for its second quarter and cut its forecast of full-year earnings per share, news that resulted in shareholder lawsuits against the company. The company blamed its poor quarter on sudden changes to Facebook’s algorithm and delays in its pipeline of new titles.
“Facebook gaming is likely contracting and Zynga is trying to offset that by growing in mobile,” Hickey said. “But that inflexion point could be quarters or even years away.”