Updated 22 May, 2013, 9:02 am IST

Law firm accuses Zynga of failing to disclose key data

01 Aug, 2012 |

A California law firm sued Zynga Inc , accusing the game publisher of failing to disclose a rapid decline in users and revenue. The social gaming giant behind "Farmville" and a plethora of other Facebook games last week stunned Wall Street by reporting quarterly results well below expectations and slashing its 2012 revenue forecast. Its stock plummeted 42 percent to a record low and analysts cut their recommendations on the stock.

Zynga's stock plummeted 42 percent to a record low

Zynga's results also cast a pall over Facebook Inc because the No. 1 social network relies on Zynga for roughly 15 percent of its revenue.

In its lawsuit, the law firm Kessler Topaz Meltzer & Check LLP accused Zynga of concealing declines in users and the sale of virtual goods, the company's prime revenue source.

In its filing, submitted late on Monday, the San Francisco law firm sought class-action status for its lawsuit. Zynga could not be immediately reached for comment on Tuesday. Its shares fell 3 percent to $2.91 in morning trading.

Reuters

Tags: Zynga , Zynga stocks , Zynga games , Zynga Facebook games , Zynga quarter 2 results , Zynga second quarter results , Zynga key data

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