* Correction: Ok so I posted this article below and thanks to Eamonn an tomgara (2 of our readers, I hope they still are!) its not entirely true. Zynga is not actually turning down money, because as he mentions in his comment the shares are being sold by a former exec and not Zynga so technically its not an investment. But apparently Zynga is still getting sued! In conclusion we’d like to thank our readers for their input, and we’ll try our best to avoid such mishaps in the future!
Zynga the world’s leading social game developer is apparently refusing to let Alpha investments an Abu Dhabi firm from purchasing a stake in the company. According to Arabian Business Alpha investments has a contract to purchase one million shares from Andrew Trader, a former executive at the gamemaker. The price tag for the one million shares is $12.87 million, which if true puts Zynga at a value of $6.2 Billion.
Alpha has already filed a complaint stating that Zynga is in the wrong for not letting them purchase the stake in the company, but Zynga replied saying that they are in full compliance with all federal and state securities laws.
And added the following:
“Sometimes would-be buyers do not fully understand or appreciate the need for such compliance,” Jay Monahan, deputy general counsel.
I’m not sure what that exactly means, but I’m pretty sure for a company that was trying to raise more capitol not too long ago, turning money down doesn’t make sense. It’s still early to determine how this will pan out and given that there aren’t a lot of details around the issue it would be premature to pass any judgment but still who turns down $12.87 million there better be a really good reason.
Do you agree with Zynga refusing to accept money from Alpha Investments? Let us know your thoughts below.