Perhaps Zynga (NASDAQ:ZNGA) should create a game about its drama-filled self!
OK, so what’s the latest? Well, the game developer has filed a lawsuit against a former employee, Alan Patmore. He was the general manager of CityVille and in August left Zynga for rival, Kixeye (the company isn’t a defendant in the case).
Zynga claims Patmore essentially committed “theft” of its intellectual property, including about 760 documents that detailed information on things like successful game dynamics, monetization and game features.
No doubt, Zynga should fight to protect its valuable assets. But this does present a tricky situation: Might a lawsuit scare away current and potential employees? It does seem reasonable. Already, Zynga has seen a variety of top executives leave the company.
Now, as I noted in the IPO Playbook just last week, Zynga’s shares are selling at roughly its net asset value. In other words, it’s a good bet that the stock price is at bottom.
Yet if the company wants to get back on track and post gains, it will need to find a way to produce hits again. But suing a former employee could, unfortunately, make this much tougher.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.