Zynga Secures Dismissal Of Stock Manipulation Lawsuit
A lawsuit against Zynga alleging manipulation of share value has been dismissed by a federal court. The suit brought by shareholders alleged that Zynga executives committed fraud, misleading investors in advance of its December 2011 initial public offering.
U.S. district judge Jeffrey White made his ruling based on the plaintiffs’ failure to support the claims made in the filing. Additionally, Judge White dismissed claims related to an April 2012 case related to a second stock offering, as the plaintiffs didn’t purchase shares and, therefore, do not have a stake.
Zynga recently laid off 15 percent of its staff, one of the first major moves since former Xbox boss Don Mattrick took over the CEO role. Matrrick joined a company in decline, with numerous top executives departing. Shortly after his arrival, Zynga announced the closure of Draw Something Studio OMGPop (which it purchased for $200 million just 440 days prior) along with the closure of other developers.
The company recently acquired NaturalMotion, creators of the Euphoria engine. Euphoria has been used in a number of titles, including Star Wars: The Force Unleashed and Grand Theft Auto V.
Zynga is struggling to reorganize itself and get back on its feet after its bubble burst. Being able to put this case in the past will help. Zynga’s brand of gaming has fallen out of favor, and the company will need to rebrand itself in order to survive and thrive.