In some worrying news for social gaming giant Zynga, one of their main underwriters has dumped a lot of their stock. According to reported based on documents filed with the SEC, J.P Morgan now owns only 2.6 million shares in Zynga which is less than half a percent. This is in contrast to their 6.7 million shares they held in 2012 which represented a 6.7% stake. This “reduction” of stock by J.P. Morgan is significant as they were a key institutional investor going back to Zynga’s IPO launch where they served as an underwriter. At the time part of the agreement involved J.P. Morgan purchasing an undisclosed amount of shares in the IPO launch.

The decision to cut back with Zynga is seen by many as a loss of confidence in the company’s future by J.P. Morgan. It was back in March 2012 that Zynga were downgraded from “neutral” to “overweight” which resulted in the stock falling over 6%. They then reversed their grading to “overweight” only a month later. Zynga has had a difficult 2012 with their disappointing as well as their controversial Draw Something acquisition which was seen as many as been overpriced.
Despite their problems Zynga is focusing heavily on their real money gambling option which is progressing as we speak.  While news like J.P. Morgan’s loss of confidence in Zynga does not bode well for the gaming powerhouse, Zynga is in a position to turn their fortunes around with their real money gaming prospects which are getting closer and closer by the day.

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