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Zynga Insiders Dumped 43 Million Shares Before Stock Crashed
It's been a bad week for Zynga. It's stock took a dive earlier in the week, falling over 41 percent to a low of $2.99 (at the time of this writing, it is trading for $3.17 a share). But what's really notable is the fact that many large investors in the company -- including founder Marc Pincus -- had recently cashed out huge amounts of Zynga stock, to the tune of $516 million.
In April, which as Yahoo Finance notes is in the same financial quarter that the company's poor earnings prompted its stock to fall, Zynga held a "secondary stock offering." This offering consisted solely of stock owned by Zynga executives and well-heeled investment houses. All told, they sold off 43 million shares at $12 a share -- shares which are now trading for a little over $3.
Marc Pincus himself sold 16.5 million shares for over $200 million. Zynga CFO David Wehner sold 386,000 for $4.6 million, and former EA and Microsoft exec and current Zynga COO John Schappert sold 322,000 shares for $3.9 million.
While there is no evidence of wrongdoing as yet, it certainly looks suspicious when so many company insiders dump stock in the same quarter that the company's financials go south.
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