He had revolutionized personal computing and created an iconic brand -- only to be forced out of the company he had built into a billion-dollar colossus.
What's going on with Zynga (ZNGA) right now? (I'll provide the Zynga quotes.)
Mark Pincus revolutionized social gaming, creating an iconic brand -- and now is a pariah, despite his billion-dollar-revenue company.
What was Steve Job's job?
Jobs was Apple's chief visionary, a role that put him in charge of the team developing Apple's next revolutionary product, the Macintosh computer.
What are pundits saying about Pincus?
Clueless CEO; but good visionary [...]Never questioned his vision. Should not be CEO.
In other words, the same problem they had with Jobs. Not a good CEO.
Jobs "demanded so much from the people who worked for him. That was part of his greatness," Simon said. "But he drove people too hard. … being gentle and polite was not part of his demeanor."
What Jobs said about the turnaround:
"I even thought about running away from (Silicon) Valley. But something slowly began to dawn on me. I still loved what I did. The turn of events at Apple had not changed that one bit. And so I decided to start over."
Here's the deal: Pincus still loves what he does, or he would have taken his millions and quit already. Online gambling is just as real an opportunity as it was last year. The insider trading scandal proves one thing: Pincus is a repugnant opportunist. Which is what I said last year. Nothing has changed.
Let's chat a litle more about online gambling.
Zynga , the world's leading provider of social game services, and bwin.party, the leading international real money gaming operator, today announced an exclusive partnership to offer real money online Poker and Casino games in the UK market. Zynga's UK-based RMG service and bwin.party will launch RMG products including Poker and a full suite of 180 Casino games in the first half of 2013, which include table games such as slots, roulette and blackjack.
This is in the UK. California alone represents 12% of the U.S. population, and has budget pressures pushing it to pass online gambling legislation. The lobbying effort in California is lead by Zynga. Online gambling in California can begin within two years, and as a story combined with international, will yield a forward-looking valuation optimistic towards the other states.
Poker was Zynga's first game. Zynga made the #1 Facebook (FB) poker game. Zynga developed the token monetization model that Facebook is now pursuing with virtual gifts. It's the same token psychology used at casinos. Mark Zuckerberg was a psychology major -- Facebook would not have succeeded without his insight into human behavior. Ultimately, these companies are about psychology, not technology. Give Pincus some credit for developing the token monetization model and other psychological technologies.
Zynga (Pincus) is buying back shares now at $2. They IPO'd at $9.
It's time to buy.
If you think about it, Pincus is a smart investor. He "shorted" Zynga at the top. He bought Facebook shares early. He predicted that Amazon (AMZN) would outperform Ebay (EBAY) 5 years ago. If Pincus is buying something -- anything -- we should be buying it, too. He is like David Einhorn. Note that Pincus himself has not disclosed a buyback, but that he has majority control of Zynga.
The stock is trading near its tangible assets -- those are the only numbers we need to know. The rest is a Steve Jobs story.
Don't worry about mobile.
While it is true that the desktop platform benefited from Facebook's original spam-friendly notifications ("Help Your Friend John Get A Pig In Farmville"), you should wholesale-reject the idea that Zynga is not mobile. The fact that Zynga was built in a desktop medium says nothing about the actual identity of its content. Zynga games are cloud-based, easy to learn/play, and designed for short, habitual periods of use: this means that Zynga was designing for mobile from the beginning. And let's not forget, Zynga still makes more money with these Facebook games than anyone else.
We communicate often using text, sounds, and videos. Gaming is the next unit of interpersonal communication. Pincus is a big part of this movement. Mobile is about communication -- so is Mark Pincus.
Don't worry about Farmville.
Analysts have seen a decline in players with the most recent games. This clashes with their desire to draw a curve through a set of points and predict the future. So they make the unceremonious conclusion that the growth curve in the last two years is more relevant than the growth line of the entire company history. They also misunderstand the falloff in total users from acquisitions like Draw Something, because they ignore the context of turning free users into paying users.
Don't worry about Pincus.
He is a ruthless opportunist, in my opinion. I don't think he cares very much about shareholders. But his interests are in overall alignment with shareholders.
The fact that employees have left the company is just a sign they didn't want to be shareholders. They wanted all the reward with none of the risk. Just like non-accredited investors complaining about not having an opportunity to buy Facebook at 2005 prices in the 2011 IPO. They complained about not having enough upside. But were they willing to bet early, to take risks?
Now Zynga is cheap. Maybe it's risky. The company has plenty of cash. Look, if you want cheap, if you want growth, you have to take risks. Unless you have a time machine and you can go back to 2004 and hand Zuck a check for theFacebook.
Zynga is bottoming.
I'm not your financial advisor. I'm not telling you what to do. You know what to do.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in ZNGA over the next 72 hours.