Press release from Business Wire
Robbins Umeda LLP Announces an Investigation of Zynga Inc.
Friday, August 03, 2012
Robbins Umeda LLP Announces an Investigation of Zynga Inc.15:40 EDT Friday, August 03, 2012 SAN DIEGO (Business Wire) -- Shareholder rights firm Robbins Umeda LLP is investigating possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Zynga Inc. (Nasdaq: ZNGA). Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Gregory E. Del Gaizo at (800) 350-6003, firstname.lastname@example.org, or via the shareholder information form on the firm's website. Robbins Umeda LLP is investigating whether directors of Zynga breached their fiduciary duties to the company and its shareholders by acting in its own interests with regard to its initial public offering ("IPO") and secondary offering, rather than in the best interests of the company. Pursuant to the company's IPO Prospectus filed with the U.S. Securities and Exchange Commission ("SEC") on December 16, 2011, Zynga's officers and directors agreed to certain lock-up provisions restricting their sale of Zynga common stock until May 28, 2012. On March 14, 2012, Zynga filed a Form S-1 Registration Statement and Prospectus with the SEC in connection with its secondary offering of 49,414,526 shares of Zynga's Class A common stock for certain insider shareholders. On March 23, 2012, before the secondary offering was completed, Zynga filed an Amendment to Form S-1 with the SEC, authorizing the secondary offering of 42,969,153 shares of Class A common stock and waiving the lock-up restrictions that previously restricted Zynga insiders from selling their common stock until May 28, 2012. The secondary offering was completed on April 3, 2012. On July 25, 2012, Zynga announced its financial results for the second quarter of 2012, reporting a net loss of $22.8 million in the second quarter compared to a net income gain of $1.4 million for the same quarter of 2011. Zynga's sales for the quarter were $332.5 million, compared to the $343.1 million that analysts had projected. Further, Zynga reported a profit of $0.01 per share, 84% less than the expected $0.06 per share. Zynga also drastically lowered its full year outlook for the rest of 2012. On this news, Zynga's stock plummeted 40% down to a July 26, 2012 trading low of $2.97 per share. Since the completion of Zynga's Secondary Offering, Zynga's common stock value has dropped 75%. Notwithstanding, Zynga officers and directors were able to sell the shares they received in the secondary offering for $12 per share for proceeds of over $500 million before Zynga's second quarter financial results were announced. Robbins Umeda LLP highlights that Zynga shareholders have the option to file a shareholder derivative action to hold those officers and directors accountable for damaging the company. Remedies commonly sought in derivative actions include corporate governance reforms designed to prevent future misconduct, removal of officers or directors whose misconduct injured the corporation, and monetary payments in the form of damages and disgorgement of ill-gotten gains. Robbins Umeda LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested. For more information, please go to http://www.robbinsumeda.com. Press release link: http://www.robbinsumeda.com/shareholders-rights-blog/zynga-inc/ Attorney Advertising. Past results do not guarantee a similar outcome. Robbins Umeda LLPGregory E. Del GaizoInfo@robbinsumeda.com(619) 525-3990 or Toll Free (800) 350-6003www.robbinsumeda.com