Zynga’s Credit Line Gets Cut From $1 Billion To $200 Million
Zynga used to have a $1 billion unsecured revolving line of credit, which has now been replaced with a $200 million credit facility. The length of the line has been increased from four to five years though. The line of credit still remains unsecured. Zynga is known for developing numerous social games like CityVille and FarmVille.
Zynga is going through rough times. The company’s stock price plummeted since going public, causing their value to go down from it’s high point of almost $12 billion to around $2 billion. Zynga is still highly dependent on Facebook for their user base. The company is struggling to keep their users engaged and is losing marketshare to companies like King.
As a result, Zynga consistently has been reporting disappointing quarters. The company recently laid off around 18% of their workforce. Morgan Stanley, Goldman Sachs, Bank of America, and JPMorgan Chase dropped the company’s credit limit due to weak financial forecasts. Zynga currently has $1.3 billion in cash and short term investments. The company’s market cap is at slightly over $2 billion.