Zynga Shares Advance Following Online Gambling Announcement
The company posted impressive third-quarter revenue and will buy back $200 million of its own stock.
Shares of Zynga rose 14 percent after the closing bell once the beleaguered maker of social games like Words With Friends posted relatively solid quarterly earnings and announced it would get into the gambling business.
Zynga lost $53 million in the third quarter, the company said Wednesday, down from earnings of $12.5 million a year earlier. The loss was largely due to a write-down associated with the $183 million acquisition of OMGPop, the maker of Draw Something.
Revenue was up 3 percent to $317 million, about $27 million more than Wall Street analysts were expecting.
Zynga said it will buy back $200 million of its own shares and that it will launch online poker and other games that involve users winning real money in the UK during the first half of next year.
Ealier this week, Zynga laid off 5 percent of its staff and shut down some of its games in an attempt to return to growth as its stock has languished, off 75 percent since the company went public 10 months ago.
On Wednesday, Zynga shares were up 7 cents to $2.13 during regular trading and they advanced 28 cents after the closing bell.