Mark Pincus’ move in April to sidestep lock-up provisions and dump $190 million of stock in Zynga in an unorthodox stock offering keeps looking worse. The CEO and co-founder of Zynga sold 16.5 million shares for $11.64 each four months after Zynga’s initial public offering priced for $10.
On Friday morning, Zynga’s stock plummeted by 18% to $2.31 after the social gaming company reduced its financial guidance for 2012. Those shares Pincus sold earlier in the year are worth $38 million today. His entire remaining stake in Zynga is worth about what he sold those shares for in April. “Let’s not lose sight of the bigger picture,” Pincus wrote on his CEO blog Thursday after the markets closed. “The world is playing games, and is increasingly choosing social games.”
The big picture for Pincus is that he has pocketed a lot of cash this year selling shares in two companies that are joined at the hip and have been disasters for stock investors. An early investor in Facebook, Pincus sold slightly more than 1 million Facebook shares in the Facebook IPO for the post-fee sum of $38 million. With Facebook down nearly another 3% on the bad Zynga news, those shares would be worth about $22 million today if Pincus had kept them. Pincus owned about 4.3 million more Facebook shares after the IPO—who knows if he dumped those after the lock-up expirations went away. He no longer has to file Securities & Exchange Commission filings related to his Facebook stock.
Pincus has a track record now of big IPO train wrecks. He founded Support.com and took it public for $14 a share during the first Internet bubble in 2000. The stock zoomed up by 133% in its first day of trading. It changed hands for more than $30 per share before tanking below $5 in 2001. It appears Pincus may have managed to sell a few million dollars of shares in Support.com (there are no Form 4s showing this on the SEC's web site, but his stock ownership did drop significantly). Still, even if he did sell some Support.com stock, he only did so after the stock cratered. Either way, he has not repeated that mistake with Zynga.
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- Mark Pincus