Needham & Company Places Zynga (ZNGA) Rating Under Review

Needham & Company analyst Sean McGowan but its Buy rating on Zynga (NASDAQ: ZNGA) Under Review after CEO Don Mattrick, who joined the company less than two years ago, announced he is leaving and being replaced by Zynga's founder and former CEO Mark Pincus.

McGowan said, "We see very little in this news that can be construed positively, as the founder, who was replaced less than two years ago in the aftermath of the company's poorly executed IPO and subsequent revenue collapse, is being brought back to replace a more recent CEO whose turnaround efforts we view as having been incomplete at best. We are suspending our rating on ZNGA shares pending the release of 1Q results, as we believe the uncertainty over the fundamental prospects, a lack (so far) of a clear explanation of why Mr. Pincus is the best choice now to run the company, and some sense of how stable the executive ranks will be leave us with very little basis for a rating and price target at this point."

For an analyst ratings summary and ratings history on Zynga click here. For more ratings news on Zynga click here.

Shares of Zynga closed at $2.90 yesterday.

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