Last night, as expected, new Zynga (ZNGA) CEO Don Mattrick cleared the decks and reset expectations for the next year.
His message to Wall Street last night was: don't expect much from us for 6-12 months.
He also had a new message that has caused the selloff today in the stock: don't expect us to do real-money gaming.
This has been investors' big hope for Zynga. It was the free-call option built into the stock at this price.
Mattrick was saying that the company can't realistically get a license in the U.S., so it has to call a spade a spade and focus on the core free-to-play gaming business instead.
The call said a lot about Mattrick's style last night. He's clearly now in charge. Mark Pincus introduced the new chief exec and then said nothing for the duration of the call. It's Don's show now.
Mattrick also answered every analyst question or directed the CFO or COO to answer them. They did so dutifully.
I'm not sure how long COO David Ko sticks around given that Mattrick suggested the state of operations are not great currently.
The turnaround of Zynga is likely coming soon. It's not four quarters away and I don't think it's even two quarters away.
They have said before the second half of the year they had a bigger game pipeline. It's likely they will have some hits in there.
Today, everyone hoping for gambling revenue is leaving the Zynga party. But this is a good entry point for a bet that they will be able to come up with at least a couple of hits in the next few months.
You are getting a business here for its cash and real estate assets. The operating business is basically worth nothing.
Mattrick was asked why does Candy Crush maker King have 400 employees and Zynga had 2,300. He said "just imagine if we get our act together and imagine how many games we can pump out each year vs. one or two for them."
This thing will likely bump around these levels for the next few weeks. But make no mistake, on the first signs of a hit game, this thing will rocket.