The following video is from Wednesday's installment of The Motley Fool's Weekly Tech Review, in which host Chris Hill, and analysts Eric Bleeker and Lyons George take a look at the biggest stories driving the tech sector this week.
In this segment, Eric and Lyons look at the recent news surrounding Zynga (NASDAQ:ZNGA) and its hiring of Microsoft's (NASDAQ:MSFT) Xbox division head Don Mattrick as its new CEO. Investors greeted the news by sending Zynga shares soaring over 20% since the news broke.
Seeing a stock that's fallen out of favor soar on the news of an executive departure isn't uncommon. For example, Groupon (NASDAQ:GRPN) has more than doubled since the departure of CEO Andrew Mason in late February of this year. However, in the case of Zynga, Eric warns that the key problem with the company has been its products, and Mark Pincus is staying onboard as the head of Zynga's products. More so, he's a notorious micromanager who hasn't worked well with high-level executives brought in during the past couple of years. Investors hoping that Mattrick's hiring could solve the woes that have brought Zynga's stock back to earth could be disappointed.
The relevant video segment can be found between 0:00 and 5:04.
Chris Hill has no position in any stocks mentioned. Eric Bleeker, CFA has no position in any stocks mentioned. Lyons George has no position in any stocks mentioned. The Motley Fool recommends Google. The Motley Fool owns shares of Google and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.