It is not surprising that in this day and age, something sweet and beautiful can turn sour in the blink of an eye. Take Zynga Inc. for instance, at one point in the company’s history, it more or less could not do any wrong, especially when you consider how all of its “Ville” games on Facebook were more or less a runaway hit. Well, the stock of Zynga has plunged to new lows since those lofty days, and to rub salt into a festering wound, Zynga has met up with a pair of lawsuits from shareholders who accuse the “FarmVille” creator of failing in their duty to warn investors about lower user and revenue growth, hence allowing its disastrous financial results to drag its share prices down further last week.
A couple of California law firms filed lawsuits that are looking at class-action status on behalf of stockholders, as shareholders are not happy that Zynga apparently concealed threats to its business and sales growth from investors. The lawsuit mentioned, “Zynga misrepresented or failed to disclose material adverse facts about its business, operations, and growth prospects.” Were you burned by Zynga’s tailspin stock price?