Why Zynga's Stock Is Getting Hammered After Hours Today

Zynga Inc ZNGA shares are trading sharply lower after the company reported worse-than-expected second-quarter sales results. The company also reported a deal to buy StarLark for $525 million in cash and stock.

Zynga reported quarterly earnings of 11 cents per share which beat the analyst consensus estimate of 9 cents per share. Zynga also reported quarterly sales of $628 million which missed the analyst consensus estimate of $713 million.

"We completed a strong first half of 2021, delivering Q2 results ahead of our guidance, including our best-ever Q2 revenue, bookings and operating cash flow. Our multi-year strategy of growing our live services, launching new games and investing in global expansion continues to position Zynga for growth," said Frank Gibeau, Chief Executive Officer of Zynga.

"Today, we are thrilled to officially welcome the Chartboost team to Zynga, as well as announce an agreement to acquire China-based StarLark – the talented developers behind the hit mobile franchise, Golf Rival," Gibeau stated.

Zynga also stated in their executive summary: "Toward the end of the second quarter, as communities began to reopen and reduce their COVID-19 restrictions, we saw softness in our bookings primarily driven by declines in player cohorts who installed our games in the early part of 2021. At the same time, the adoption of Apple’s privacy changes resulted in a higher cost to acquire our players. In response, we scaled back our UA spend to maintain target returns, resulting in fewer players installing our games during this period."

Zynga is trading lower by 16.4% at $8.17. Zynga has a 52-week high of $12.32 and a 52-week low of $7.77.

See also: How to Buy Zynga Stock (ZNGA)