Steadfast Capital Management, the hedge fund headed by Robert Pitts, acquired 31.5 million shares or a 5.07% stake in Zynga Inc (NASDAQ:ZNGA) based on its latest regulatory filing with the Securities and Exchange Commission (SEC).

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Zynga Earnings Report

The stock price of the online social gaming company climbed 1.90% to $3.76 per share after hours on Monday. Zynga Inc (NASDAQ:ZNGA) is scheduled to report its financial performance for the third quarter of the current fiscal year after the market close on Thursday, October 24.

Zynga Inc (NASDAQ:ZNGA) faces difficult challenges. A majority of the company’s top executives recently left and investors continue to lose confidence in its ability to develop compelling games to retain its users and maintain its profitability. As a result, the stock plummeted significantly to its lowest level at $2.09 per share over the last year.

Challenges for Zynga

Don Mattrick, the new chief executive officer of Zynga, Inc (NASDAQ:ZNGA) acknowledges that challenges continue to confront the online social gaming company, but he believes that the company has the ability to turn itself around – it just needs a lot of work to do so.

Last June, the company eliminated 500 jobs as part of its strategy to revive the company. Analysts expect Mattrick to announce additional layoffs. Zynga co-founder Justin Waldron is leaving the company to pursue a new venture, but did not provide any further details about it.

Zynga Inc (NASDAQ:ZNGA) is expected to deliver $143 million in revenue and $-0.04 losses per share for the third quarter.

Some observers in the online gaming industry believe that the catalyst for the company is its latest move in the multiplayer online battle arena (MOBA) wherein players compete against each other in a virtual arena. Zynga Inc (NASDAQ:ZNGA) recently signed an agreement with Wyrmbyte, an independent game studio to work together in bringing its free-to-play MOBA game called Dragons and Titans to Facebook Inc (NASDAQ:FB) for the latter part of this month.

In June, the online social gaming company launched Solstice Arena, its mobile MOBA game for iOS and Mac devices. The game was developed by Bit Lucky, which was acquired by Zynga last year.

Aside from Steadfast Capital Management, some of the largest investors of Zynga Inc (NASDAQ:ZNGA) include Morgan Stanley (NYSE:MS), The Vanguard Group Inc, Tiger Consumer Management, and Silver Lake Group.