Is This Zynga Inc (ZNGA)’s J.C. Penney Company, Inc. (JCP) Moment?

In fact, this week’s news seems eerily similar to June 14, 2011, when J.C. Penney Company, Inc. (NYSE:JCP) announced it would replace then-CEO MIke Ullman with Ron Johnson. Like Zynga’s news this week, J.C. Penney Company, Inc. (NYSE:JCP)’s announcement sparked a 17.5% rally in shares of the beleaguered retailer that day.

And like Mattrick, Johnson came with an enviable pedigree after he left Apple Inc. (NASDAQ:AAPL) as the accomplished head of its retail store operations. Before that, Johnson worked as vice president of merchandising at Target Corporation (NYSE:TGT), helping to boost consumers’ perceptions of the stores as a more stylish place to shop by launching exclusive household items designed by architect Michael Graves.

Of course, we all know Johnson ended up finally getting ousted from his post after his ambitious turnaround plan proved too much for struggling J.C. Penney Company, Inc. (NYSE:JCP) to endure. Shortly afterward, the company ended up bringing back Ullman as CEO with the hopes of salvaging what was still left.

The thing is, while Johnson’s plan was a radical one, I actually thought it had at least a small chance of succeeding over the long run, especially when we remember he was trying to effectively change the unfavorable economics of J.C. Penney Company, Inc. (NYSE:JCP)’s business by focusing less on the coupon-clipping crowd and more on higher-spending, everyday value type consumers.

Foolish takeaway
But at the end of the day, superinvestor and CEO Warren Buffett had it right all along when he famously said, “When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”

Unfortunately for Don Mattrick, it’s definitely safe to say Zynga has a reputation for bad economics. And even if Zynga does manage to properly execute on its online gambling ambitions, I’m still convinced Mattrick will have one heck of a time morphing the company into anything close to being worthy of our hard-earned investing dollars.

For now, anyway, I just can’t buy into this false hope.

The article Is This Zynga’s J.C. Penney Moment? originally appeared on Fool.com is written by Steve Symington.

Fool contributor Steve Symington owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft.

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