Zynga should consider looking for a buyer if pressure mounts from shareholders looking to recoup losses incurred in the months following the struggling social game developer's December initial public offering, analysts polled by Bloomberg said Wednesday.
Zynga's stock has plummeted 70 per cent since its IPO and shares are currently priced at $2.97 (£1.87). The company is currently trading at just 1.03 times sales, "the worst valuation in the industry," according to Bloomberg.
The news service noted that Zynga CEO Mark Pincus, the San Francisco-based company's controlling shareholder, said last July that he'd "never consider a sale." But analysts from Ironfire Capital and Sterne Agee & Leach said potentially disgruntled shareholders would "welcome" a buyout and might soon start pressuring bosses to put the company on the market.
One Falcon Point Capital analyst figured that Zynga might get an acquisition offer as high as $7.30 (£4.60) a share, but another from Needham & Co. told Bloomberg that Pincus "probably wouldn't consider an offer below the IPO price of $10 (£6.30)."
Zynga's struggles have been exacerbated by poor quarterly performances in its brief life as a public company. A fully-fledged shareholder revolt has yet to materialise, but a couple of shareholders did file lawsuits against the company earlier this month over allegedly failing to warn them of how dismal Zynga's second-quarter numbers were.
Popular Zynga games such as FarmVille and CityVille have been haemorrhaging players in recent months, according to Bloomberg, while some reports have indicated that ex-COO John Schappert, who resigned a couple of weeks ago, was squeezed out as the company refocuses on mobile.
Zynga's biggest problem in the eyes of investors is its dependence on Facebook as a platform for its revenue-generating games. That relationship is seen as having damaged Zynga in both real sales and in share price.