Zynga shares plunged more than a third in after-hours trade on Wednesday as the online social games maker badly missed earnings expectations.
Shares slid 38 percent to US$3.16 in reaction to the news of a US$22 million loss for the company, which went public last year at US$10 a share.
The net loss for the second quarter amounted to US$0.03 a share. Adjusted for special items Zynga showed a profit of US$0.01 per share, far below Wall Street expectations of US$0.06.
Jon Ogg at 24/7 Wall Street said that in addition to the weak results, Zynga offered “poor guidance” for the current quarter.
“The young company has been gutted since its IPO,” Ogg said, noting that shares had been “barely above US$5 after having traded above US$15 briefly at its recent peak.”
“The world is just over its love affair of Web 2.0 (or is it 3.0 yet?) companies with complex share structures and new-age leadership,” Ogg added.
Zynga, which grew out of a game platform on Facebook, reported revenue of US$332 million, up 19 percent year-over-year.
“The company achieved some significant milestones in the quarter including the launch of Bubble Safari, which is now the No. 1 arcade game on Facebook, and the launch of The Ville, now the No. 2 game behind Zynga Poker,” Zynga chief executive and founder Mark Pincus said.
“Our advertising business continued to show strong growth with revenue up 170 percent year-over-year. Our games reached record audiences, achieving over 300 million monthly active users,” he said.