Zynga Pump and Dump: BUSTED.
Adam Rifkin stashed this in Zynga!
Stashed in: Silicon Valley!
Here comes the insider trading lawsuit by the law firm Newman Ferrara: http://assets.sbnation.com/assets/1267398/Zynga_Complaint_Filed.pdf
"Zynga's regular employees were still locked up from selling their shares. But the guys at the top, who saw what was coming down the pipe, got to cash out," said Ferrara attorney Roy Shimon:
Avoiding the lockup allowed executives to sell at a time when Zynga had been issuing positive outlooks on its business, operations, and growth prospects, such as significantly higher bookings projections for the second half of 2012. When the secondary offering was first reported in March, Zynga said that it hoped to "facilitate an orderly distribution of shares and to increase the company’s public float." The rationale given by the company was that it was better to stagger the sale of shares, rather than wait for everyone to sell at the same time in late May.
A Zynga employee who asked to remain anonymous said the situation was hard on morale. "It's not easy for folks to see that the executive team were selling their shares while most people were still locked up."
On another note; how do you think this affects second market and pre-IPO private markets? It seems more employees would want to push to off load their stocks prior to IPO after seeing groupon, zynga, Facebook and other tech company stocks plummet during the lock-up period.
http://www.quora.com/Facebook-1/Should-Facebooks-falling-stock-price-matter-to-Facebook
Hey, Maybe it's not just deal or no deal contestants who are bad at determining expected value: http://pandawhale.com/convo/4118/historical-adventures-newcomer-teacher-invents-educational-role-playing-game
That's funny about Janka.
On your side note:
This definitely affects ALL markets in tech: seed, venture, secondary, and public.
Every investor is more nervous right now, so fewer deals are getting done.
Thanks a lot, Zynga and Facebook.
11:52 AM Aug 01 2012