The poster boy for casual gaming, Zynga, has announced it expects to posts a loss of $103 million for the Q3 period (July-September) this year.
Minutes after the announcement the share price for the company fell 20% to $2.19. The company initially floated at $10 a share and rose to $16 a share at one point.
Zynga are blaming the majority of loss on the write off of half the cost of purchasing OMGPOP, the publishers of Draw Something.
Analysts are said be “stunned” by the announcement, “They’ve got 3,000 plus people and for the level of revenue they’re generating, we should expect massive layoffs at Zynga,” commented Sterne Agee analyst, Arvind Bhatia.
The company has adjusted their yearly earnings to a range between $147 million and $162 million, previously they had forcast $180 million to $250 million. These figures do not include tax, interest and depreciation so once they have been taken out of the profit there will be even less for shareholders.