Zynga Inc (ZNGA), Facebook Inc (FB): When Limelight Fever Strikes the C-Suite

Were you baZynga’d?

Shareholders of Zynga Inc (NASDAQ:ZNGA), the social gaming company, have already felt the pain of limelight fever. CEO Marc Pincus overpaid to the tune of $210 million for OMGPop, a gaming company that had only one successful game, Draw Something, which immediately starting losing players.

He also sold 16 million shares at almost the top of the range near $15.00. The stock has since plunged to as low as $2.09. This sale was also followed closely by Pincus’ purchase of his 1907 Gold Coast mansion in San Francisco for $16 million. Contrast that with Warren Buffett’s  fairly modest digs in the Happy Hollow neighborhood of Omaha for which he paid $31,500 almost 55 years ago.

Those two red flags weren’t all. Zynga’s headquarters costs the company $210 million. Frisco real estate is pricey but really?! As I wrote about a temp’s experience at Zynga the perks are great for workers. Even so, many of their executives and best game designers are fleeing.

Pincus was listed by The Motley Fool and CNBC as one of the Worst CEOs of 2012. To be fair, Zynga Inc (NASDAQ:ZNGA) has climbed up 50% from its low and the long awaited online gambling with real money is beginning in earnest in the UK. It has also been weaning itself from dependence on the Facebook Inc (NASDAQ:FB) platform. Zynga currently has earnings of -$0.28 per share.

Give it to me straight, doc

If you’ve owned these stocks you have already experienced some pain. A little surgery from the portfolio of Zynga Inc (NASDAQ:ZNGA) and Martha Stewart Omnimedia is recommended. Both Stewart and Pincus seem to have a raging case of limelight fever.

Facebook Inc (NASDAQ:FB) is a more delicate situation. It is hotly debated as having incredible monetization potential. It hasn’t performed as badly as these other two and it makes money (barely). Still, observation and caution are prescribed whenever you see the previous warning signs of limelight fever.

The article When Limelight Fever Strikes the C-Suite originally appeared on Fool.com.

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