NEW YORK, NY / ACCESSWIRE / November 8, 2017 / Shares of Snap tanked in after-hours trading on Tuesday after announcing a disappointing third quarterly report and that it would be redesigning its app. Shares of Zynga also closed down despite meeting expectations in its third quarterly report.
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Zynga Inc.'s shares closed down nearly 5% yesterday on nearly 29 million shares traded. The company saw its shares head south despite meeting expectations in its third quarter financial report. Zynga reported net income of $18.1 million, and a profit of 2 cents per share. Wall Street had been waiting for 2 cents. Revenue of $224.6 million was also in line, as Wall Street was waiting for just $209.8 million. The "Farmville" maker has forecast revenue in the range of $210 million for the current quarter. Analysts had been waiting for $222.4 million. This may explain why traders were concerned. In other news the company announced that it has entered into an agreement to acquire a mobile card game studio of Peak Games. Peak Games is a leading global mobile gaming company. Senior Vice President of Games Monty Kerr, commented, "We're excited to welcome the talented team behind Peak Games' mobile card game portfolio to Zynga. The social card games they've developed have broad, evergreen appeal to millions of people around the world, and build on Zynga's strong foundation as we continue to grow our card portfolio over the long-term." Kerr continued, "The acquisition will enhance our card based audience and will be accretive to our near-term margin goals. When combined with the recent growth of our forever franchise Zynga Poker and our Solitaire titles, at closing the addition of Peak Games' mobile card games will give Zynga the world's largest portfolio of mobile casual card games."
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Snap Inc.'s shares closed up 1.96% yesterday on nearly 41 million shares traded. The stock may have closed in the green but plummeted in after-hours trading, seeing losses of as high as 20%. The company reported its third quarter financial results after the close which failed to impress Wall Street. Not only did the company report slower user growth than expected, but its CEO also announced the company would be redesigning the SnapChat app. CEO Evan Spiegal said, "We are going to make it easier to discover the vast quantity of content on our platform that goes undiscovered or unseen every day." Traders weren't happy when he admitted that was a "strong likelihood" that in the short term the redesign would be disruptive. Combined with the company reported 178 million users in the third quarter compared to the expectation of 181.8 million, it was not a good day for the company. According to BTIG analyst Rich Greenfield, "It seems like a significant amount of change in a short period of time." Revenue for the third quarter was $207.9 million. Analyst were waiting for $236.9 million. Revenue per user was $1.17, analysts were waiting for $1.30.
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