Zynga is following in Groupon’s footsteps to become the second IPO-bound tech company this week to amend its Securities and Exchange Committee filings, reports the New York Post.
Yesterday, Zynga was forced by the SEC to restate its Q1 results after the commission found a “material weakness” in its accounting method. The SEC asked that Zynga focus on strict revenue instead of the less traditional “bookings” metric it used in its first filing, which calculated sales of virtual goods in Zynga games like FarmVille and CityVille.
The SEC also wasn’t pleased with CEO Mark Pincus’ letter to shareholders that he included at the top of a July filing (it was later placed lower in an amended filing). The letter, which the Post describes as being “rife with folksy tales about the company's humble beginnings and grandiose missions,” has come under fire for being “unnecessary and self-aggrandizing.”
As a result of the refiling, Zynga’s sales increased $7.5 million. In the first quarter of 2011, the company said, it brought in $242.9 million in revenue and posted a net income of $16.76 million.