A lawsuit was filed by a current investor in NASDAQ:ZNGA over alleged breaches of fiduciary duties and NASDAQ:ZNGA investors should contact the Shareholders Foundation.
San Diego, CA -- (SBWIRE) -- 09/05/2012 -- An investor in shares of Zynga Inc (NASDAQ:ZNGA) filed a lawsuit in the U.S. District Court for the Northern District of California against Zynga, Inc. over alleged violations of Federal Securities Laws in connection with certain financial statements.
Investors who purchased shares of Zynga Inc (NASDAQ:ZNGA), you have certain options and you should contact the Shareholders Foundation at mail(at)shareholdersfoundation.com or call +1(858) 779 - 1554.
The plaintiff alleges that prior to the initial public offering of Zynga Inc in December 2011 certain defendants entered into lock-up agreements with underwriters of the IPO, which barred them from selling shares of Zynga common stock until May 28, 2012.
However, so the plaintiff, certain defendants did not intend on waiting until May 28, 2012 to unload their stock, but rather obtained releases from the lock-up agreements, permitting them to sell their personally held shares early and well in advance of the original May 28, 2012 expiration date. The plaintiff says that as a result of those waiver of the lock up agreements certain defendants sold over 20.2million shares for over $235 million.
The plaintiff claims that defendants negotiated out from under their lock-up agreements and sold their shares because they knew that the company was experiencing negative trends in its business that would destroy the company’s growth prospects and cause the price of Zynga stock to plummet. Instead of approximately adjusting the projected guidance in response to the negative trends the company was experiencing its core operations, defendants raised their already aggressive financial guidance on April 26, 2012, so the lawsuit.
Then on July 25, 2012, Zynga Inc (NASDAQ:ZNGA) reported its second quarter 2012 financial results. Among other things, Zynga Inc announced a net loss of $22.8 million for the second quarter of 2012. In addition, Zynga Inc announced that it is lowering its outlook for 2012.
Shares of Zynga Inc (NASDAQ:ZNGA) declined from as high as $14.69 per share to as low as $2.70 per share on August 2, 2012.
On September 4, 2012, NASDAQ:ZNGA shares closed at $2.83 per share.
Those who purchased shares of Zynga Inc (NASDAQ:ZNGA), have certain options and should contact the Shareholders Foundation.
Shareholders Foundation, Inc.
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