Zynga Founder Mark Pincus Cedes Control of Company
Social game developer Zynga is changing its stock structure in a way that reduces the voting power of its founder, Mark Pincus, it announced Wednesday.
When Zynga went public in December 2011, it had a three-class stock structure. Pincus was the sole owner of all Class C shares, as well as the majority owner of Class B shares. By converting it all to Class A common stock, Pincus is reducing his overall voting rights from approximately 70% to 10%. This allows Zynga to simplify its stock structure and establish voting parity among shareholders.
Pincus will continue to serve on Zynga’s Board of Directors as non-executive chairman. Zynga will also nominate him as a director of the Board in future elections as long as he continues to hold one-half of his current shares.
“Over the past three years, I’ve been working with [CEO Frank Gibeau] and the Board to restore Zynga’s focus on our core live game franchises like ‘Zynga Poker’ and ‘Words With Friends’ — and the players who love them. That work is paying off. Our game teams are delivering quality and value for our players, which is translating into growth and profitability for our company. Given our positive momentum, now is the right time to simplify our stock structure and transition to one share, one vote. I believe it’s in the best interests of our shareholders to establish voting rights parity for all,” said Pincus. “Going forward, I’m excited to continue to play an active role and to partner with Frank and the Board to drive innovation and growth.”
Zynga reported positive financial results for the first quarter of 2018 yesterday. It made an estimated $208 million in revenue, a 7% increase year-over-year. The company is now valued at $3 billion, largely thanks to mobile games like “Words With Friends” and “Zynga Poker.” Mobile revenues rose 13% to $182.6 million in Q1 2018 and account for 88% of Zynga’s total earnings.
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