NEW YORK--(BUSINESS WIRE)--Newman Ferrara LLP (www.nfllp.com) has begun an investigation on behalf of shareholders of Zynga, Inc. (“Zynga”) (Nasdaq: ZNGA) into potential violations of federal securities laws and breaches of fiduciary duty by Zynga and certain of its officers.
On July 25, 2012, Zynga announced its financial results for the second quarter of 2012, reporting a net loss of $22.8 million and lower than expected earnings estimates, and drastically lowering its outlook for the rest of the year. Following this announcement, Zynga’s common stock plummeted 40% in value to a trading price of $3.06 per share.
Newman Ferrara’s investigation focuses on whether Zynga misrepresented or failed to disclose material adverse facts about its business and financial condition including, among other things, that Zynga has been: (1) experiencing a rapid decline in user numbers of existing web games; (2) experiencing substantial delays in launching new web games; and (3) entirely dependent on Facebook’s online gaming platform. Newman Ferrara’s investigation also focuses on the 43 million shares of personally held stock sold by Zenga’s executive officers in April at a price of $12 per share for proceeds totaling $516 million. These insider sales were executed during the second quarter of 2012 shortly before Zynga reported terrible financial results for that quarter and prior to the corresponding 40% drop in Zynga stock price.
Investors who purchased shares of Zynga common stock between December 16, 2011 and July 25, 2012 and who have lost more than $100,000 on those investments are encouraged to contact Newman Ferrara attorney Roy Shimon at (212) 619-5400 or firstname.lastname@example.org to discuss this investigation and their rights as Zynga shareholders.
Whistleblowers: Persons with knowledge that may aid in the investigation of this matter are encouraged to contact the firm. Under the Dodd-Frank Wall Street Reform Bill, whistleblowers are protected from employer retaliation and may be entitled to as much as 30 percent of the recovery if the information provided leads to a successful action.
Newman Ferrara maintains a multifaceted practice based in New York City with attorneys specializing in complex commercial and multi-party litigation with an emphasis on securities, ERISA, mergers and acquisitions, consumer fraud, and real estate. For more information, please visit the firm website at www.nfllp.com.
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