Social media gaming has drawn a lot of attention over the past few months, largely because of Zynga, the most popular social media game-maker. Zynga is rumored to be going public sometime soon and, as the IPO date continues to be pushed back, the company is trying to position itself to maximize its value. Zynga is even going as far as revoking early employee's ownership of the company.
Zynga CEO Mark Pincus is said to have demanded stock options be revoked from several early employees just as the company prepares for its initial public offering. While the company was being built into the social media gaming giant that it is today, Pincus was giving out stock because he didn't have the funds to support high salaries. Now that the company is on the verge of increasing its valuation tenfold, Pincus is asking for stock back.
Silicon Valley culture has largely been built on the idea of giving equity rather than high paying salaires: Employees often assume if they're able to identify a growing starup early on, jump on board and build it to something great, they'll eventually reap the rewards after a large buyout or after the company goes public. This is how companies like Google and many others were built. For instance, even the masseuses that worked for Google early on are now multi-millionaires.
Zynga became a popular social media gaming company by creating franchises such as Farmville, Mafia Wars and Zynga Poker. Most of the company's games rely on Facebook, and they spread virally through the network when friend's prod someone in their network to join.
According to The Wall Street Journal, the demand to return stock would only apply to shares that have not vested. When stock is vested, it means that it is a secured right of the individual, which would mean that employees hang onto the stock even if they're fired. In the case of unvested stock, it may be seized from the individual.