Zynga Inc (NASDAQ:ZNGA) ended the last trading session with a gain of 4.4% as it geared up to report earnings on May 7th. The afterhours trading session saw the stock extending its rally to $3 levels on the back of the news of the company restructuring its workforce. The company has also reported earnings that were better than expected though the figures remained in red.
Zynga Inc (NASDAQ:ZNGA) reported an earnings per share loss of $0.05 or $46.5 million in total against the earnings per share loss of $0.07 or a total of $61 million in the same quarter a year back. The revenue was reported at $183.3 million against the sales of $168 million on a y-o-y basis. The second quarter guidance of the company was slightly better than the expectations too.
The restructuring by the founder of Zynga Inc (NASDAQ:ZNGA), and current CEO once again, Mark Pincus got the market excited too as he decided to cut off nearly 180% of the workforce or 364 employees to be exact. Mark Pincus returned last April, taking the top job back from Don Mattrick and took this decision as his first strategic step which is expected to be completed by the year end and result in charges of somewhere between $18million and $22 million in the second quarter. Still the benefit of the step is expected to be realized in the form of an annualized savings of $45 million and another $55 million down the road through other cost cutting steps like allowing Amazon.com manage its servers.
Technically, the stock has gone nowhere in the last 7 months and there are no visible signs of the scenario changing any soon. The stock is stuck in the range of $2.20-$2.90 for a long time and that sideways phase may continue in the immediate future.