Zynga's plunge dings Facebook
The fallout from trimmed earnings and revenue forecasts spreads, and an analyst cuts his FB price target.
Zynga (ZNGA) shares fell roughly 20% to a new low Friday after the company offered bleak news about its third quarter and lowered its full-year forecast.
Facebook (FB) shares dropped as well after Forbes reported J.P. Morgan analyst Doug Anmuth trimmed his target price on Facebook shares to $28 from $30 because of Zynga's troubles. Anmuth notes that Zynga accounted for 54% of Facebook’s payments revenue in Q2. He now projects 2013 Facebook payments revenue of $582 million, down from a previous forecast of $797 million. That would be a 28% year-over-year drop.
Zynga said Thursday that it will likely report a net loss of 12 to 14 cents a share for the quarter. Excluding one-time items, the company said it would likely break even or lose a penny per share. The online gaming company also said revenue would come in at between $300 million to $305 million.
The company will report its full quarterly results on Oct. 24. For the full year, Zynga lowered its bookings projection to between $1.085 billion and $1.1 billion. The previous projection was between $1.15 billion to $1.225 billion.
And the company's acquisition of OMGPOP has pretty much turned out to be a bust. Zynga announced a write-down related to the acquisition in the neighborhood of $85 million to $95 million. It reportedly paid $200 million for the app developer earlier this year.
Reported with MSN Money's Kim Peterson.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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