Presenting the Ten Greediest Americans of 2011
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This lucrative sale in no way loosened the Pincus lock-grip over Zynga. The Harvard MBA had structured the company’s stock to make him the only owner of Zynga’s “Class C shares,” stock that has 70 times more voting power than Zynga’s regular shares. Elsewhere in the high-tech industry, special shares typically carry only ten times the voting power of regular shares.
But then this fall things started unraveling.
High tech start-ups typically attract talent by offering shares of stock in their new concern, and Pincus had done just that with Zynga. But Pincus had apparently concluded, with the big IPO pending, that he had given away too many shares.
Pincus, in response to the Journal story, sent out what amounted to a non-denial denial. But follow-up news reports would soon reinforce the image of Zynga as more shark tank than romper room of inspired gamers.
The New York Times would describe a “messy and ruthless” Zynga workplace chock-full of “loud outbursts from Mr. Pincus, threats from senior leaders, and moments when colleagues broke down into tears.”
This coverage would come on top of news that the Securities and Exchange Commission, the federal watchdog over Wall Street, had told Zynga to stop using certain “non-traditional accounting measures” that could mislead investors.
Industry insiders were also starting to question Pincus’ supposed strategic business genius. The online future of gaming, analysts pointed out, rests in the mobile market. Other companies in that market were eating Zynga’s lunch.
And those other companies wanted nothing to do with Pincus. Several, including the maker of Angry Birds, rejected Zynga’s offers to buy them up, fearing that “Pincus’ hard-driving personality and iron-fisted control” was going to make keeping talent a constant uphill battle.
Early in December, amid the torrent of negative news, Pincus and Zynga signaled that the company would be asking no more than $10 per share in its upcoming IPO. That put the company’s total value at about $7 billion, only a little more than a third the estimated value that had floated around earlier in the year.
Pincus, our greediest American of 2011, still insists he’s only creating a “meritocracy” at Zynga. The question he can’t answer: What has he — or anyone, for that matter — ever done to merita billion dollars?
Sam Pizzigati is the editor of the online weekly Too Much, and an associate fellow at the Institute for Policy Studies.