OMG DROP! Stock Plummets After Zynga Takes a Massive Write-Down On Draw Something Acquisition

Nitasha Tiku — Thu, 04 Oct 2012 20:05:43 -0400

It looks like the Cinderella story that was Zynga's $183 million acquisition of the long-suffering (and then suddenly desirable) startup OMGPOP may not have a fairy tale ending. The social gaming giant released "preliminary financial results" this afternoon, ahead of its third-quarter earnings report and the downgraded forecast sent the stock price down 19 percent in after-hours trading.

The results say that Zynga expects a net loss between $90 million and $105 million for the third quarter. One reason for their lowered expectations? Zynga said it expects an $85 million and $95 million write-down on its purchase of New York City-based OMGPOP, the makers of Draw Something.

Considering the acquisition price, notes CNN, that makes half the deal's value go poof!

However, most of the blame, the company said, lies in "reduced expectations for certain web games including The Ville, and delays in launching several new games." Looks like (simulated) sex doesn't always sell.

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OMG DROP! Stock Plummets After Zynga Takes a Massive Write-Down On Draw Something Acquisition