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if you're going into zynga it's not because you want to play value, it's because you want to speculate.
the question is, do you think they will make money and grow?
if you do, then buy it. if not, then don't.
can't wait to short this chode into the dirt
Why melvvvar? They are actually a profitable company unlike LinkedIn, Pandora, Groupon, etc.
Second, I doubt you are actually going to short this stock. The cost to borrow Zynga is going to make it a completely uneconomical short unless you think it's going to decline 50% or more which it won't.
will be interesting to see if the predicted talent exodus will occur
the cost is going to be the juice running on the margin and zynga is running a business with no barrier to entry, fickle market taste and a multiple of earnings set as if they are the only game in town.
it's hard to short the stock right now due to cost...but if there's a possibility i would do it
second melvvvar's ideas
fb squeezing the margin will be a big factor competition since there are millions of social gaming firms out there although profitable... i don't envision them to be so profitable that justify their current PE. Profits will only slow overtime due to the reasons mentioned above The market is extremely volatile right now and the last thing you want to add to your portfolio is another high beta stock that will get crushed if EU doesnt pan out.
Zynga has been CF positive since 2007. They have a dominant stranglehold on market share and they are ready to branch off from Facebook to keep their margins high.
If it was so easy for competitors to step on their toes, how come it has not happened in the last 4 years? Zynga is the only relevant player in social-media gaming at this point in time, period.
I don't know if it's a buy right now or not, but I certainly wouldn't advise shorting it.
Zynga Prices Secondary Offering (Originally Posted: 03/29/2012)
So Zynga is offering another 43 million shares at $12 a pop.
"The offering, comprised of shares from a group of early investors and executives, will raise about $515.6 million."
Thoughts? Just a way for insiders to cash out before the shit hits the fan?
I believe so. Maybe I'm just cynical but I don't see a whole lot of sustained growth in the future.
Stick a fork in it.
No me gusta.
This stock is going to tank, it is a matter of time. Watch.
Zynga IPOs today (Originally Posted: 12/16/2011)
ZNGA IPO priced at $10 giving it a valuation of $7B. It is the largest tech IPO since Google. It opened at $11 and is now sinking.
http://tradingevents.blogspot.com/2011/12/zynga-ipos-today.html
Not surprised, Pandora sink when it went public on Weds from 16 to 10..
All the IPOs will trade lower than their initial offering price
Does anyone else think they should have gone with a dutch auction a la Google?
Underwriter fees....
Does anybody actually know what they "sell"?
@Bernankey: Farmville animals. But who plays Farmville, and who is still paying for Farmville?
Zynga's IPO quiet period (Originally Posted: 12/15/2011)
According to an article in the Thestreet.com, CEO, Mark Pincus has been talking up his company's ability to double the number of paid subscribers to potential investors at Warburg Pincus. This was not mentioned in its IPO prospectus.
What will the SEC think about such an event occurring during the mandatory IPO quiet period? Will there be any action? What do you guys think?
http://tradingevents.blogspot.com/2011/12/zyngas-not-so-quiet-period.ht…
Zynga just updated their SEC filing to include the fact that CEO Mark Pincus has been described as "fearsome". Not joking. It's fucking amateur hour over there.
I would definitely fear him if I was an investor
http://tradingevents.blogspot.com/
Zynga Valued Over $7 Billion, Will They Go Public? (Originally Posted: 02/16/2011)
Zynga Inc., the social gaming company, has already raised $360 million from venture capital and investment firms, not including an undisclosed amount from Google. The company recently began raising another $250 million in a new round of funding in hopes to value the company between $7 billion and $9 billion. By publishing titles like FarmVille and CityVille, which have 96 million and 51 millions active players, respectively, the company has made $850 million in revenue, and $400 million in profit. Hiring Dave Wehner from Allen & Co. as their chief financial officer last year has increased interest from potential investors who believe the company will go public soon. Many investors wish to get a piece of the company through privately negotiated deals with current or former employes, or by investing in limited liability companies. Larry Albukerk, managing director of the San Francisco based investment firm, EB Exchange Funds, says he has gotten many requests from wealthy clients hoping to invest in Zynga even before it goes public.
Social-gaming company Zynga Inc. is holding discussions with potential investors about raising around $250 million in new funding in a deal that could value the three-year-old start-up at between $7 billion and $9 billion, according to people familiar with the matter.
In April Zynga filed papers authorizing the issuance of new stock that valued the company at about $4 billion.
The discussions are the latest sign of the investor frenzy around a small class of large, fast-growing Web start-ups focused on the consumer market that have yet to go public. Facebook Inc., Twitter Inc. and the group-buying service Groupon Inc. have all recently raised large rounds of funding at sky-high valuations, with some recent discussions concerning Twitter valuing the micro-blogging service at $8 billion to $10 billion. The business social network Linked In Corp. and Internet radio service Pandora Media Inc. recently filed to go public.
Any decision to raise a fresh round of funding by San Francisco-based Zynga, which sells virtual goods in Facebook games, could be weeks away and may not happen, said the people familiar with the matter. Although valuations of the most successful Internet start-ups are getting pricey—topped by Facebook's eye-popping $50 billion value in its latest round of funding—part of Zynga's appeal is that it has tapped into a lucrative method of making money online.
The company makes an addictive array of games like FarmVille and CityVille in which people spend real money to buy virtual goods, such as seeds to produce crops in FarmVille and virtual cash to construct buildings in CityVille. Using the social connections people maintain on Facebook to spread virally, City Ville and Farmville now have 96 million and 51 million active monthly players, respectively, according to AppData.com, which tracks Facebook statistics.
The huge audience for its games—Zynga has a total of 275 million active monthly users across all its titles—helped Zynga generate about $400 million in profit last year on approximately $850 million in revenue, said another person familiar with its finances. A spokeswoman for Zynga declined to comment.
The company has no immediate need for financing because it is profitable and has raised a sizable war chest already, several people familiar with the matter said. Zynga has said it has raised $360 million from a range of venture-capital and other investment firms. That figure doesn't include an undisclosed amount from search-giant Google Inc.
Zynga is in conversations with at least one major bank about raising financing, as well as mutual funds and others, according to people familiar with the matter.
According to a person familiar with the company, Zynga has been barraged with interest from potential investors, who view the company as a likely candidate to go public within the next one to two years.
Zynga last year hired investment banker Dave Wehner from Allen & Co. as its chief financial officer in a move that was seen as readying itself for an eventual initial public offering.
One financing method Zynga will likely avoid is a "special-purpose vehicle" akin to the one Goldman Sachs Group Inc. created to allow wealthy foreign clients to invest in Facebook during the social-networking company's recent round of financing. Goldman teamed up with Russian Internet investment firm Digital Sky Technologies to invest $500 million in Facebook in January and raised an additional $1 billion through the special-purpose vehicle.
But Goldman decided against letting U.S. clients invest in Facebook because it feared it could run afoul of certain regulations relating to private placements of stock. The episode has soured people on structuring such deals, and Zynga isn't seriously looking at that option, according to a person familiar with the matter.
Zynga could use any new financing to help fuel its torrid acquisition pace. The company has averaged one acquisition a month for the past nine months, most of them involving smaller game developers. The company hired more than 800 people last year and now has roughly 1,500 employees.
The heat around Zynga is creating a frenzy among investors who are trying to get a piece of the company in the private-company share market, otherwise known as the secondary market. Some investors can purchase stock of private companies by investing in limited liability companies created to purchase such shares, or through deals brokered with current or former employees.
Larry Albukerk, the managing director of San Francisco-based investment firm EB Exchange Funds, has already brokered tens of millions of dollars of such deals for shares of hot private Internet start-ups such as Facebook, LinkedIn and Twitter. He finds employees who want to sell and then connects them to interested buyers, helping to negotiate the deal at an agreed-upon price.
Mr. Albukerk said he has gotten calls about Zynga lately from more than 100 wealth managers and professional investors. After Facebook, Mr. Albukerk said, Zynga is the hottest company. "Guys call me up and tell me just go out and get it," he said. "The number of requests and activity is crazy compared to last year."
For more information, please visit http://leverageacademy.com/blog/2011/02/16/zynga-valued-over-7-billion-….
It seems like valuations in this sector have gone out of control (doesn't anyone remember 2000?)...The S&P 500 has successfully made it to 1330 as well with the help of QE2 and its younger and even more inflationary sister, QE3 (coming soon). How is it with grain, rubber, silver, copper, etc. prices hitting all time highs, we have no inflation? Are we destined to bubble after bubble?
Yeah the bubbles are going to keep happening until the entire system collapses. Too many powerful people make too much money as the bubble inflates and don't lose anything when the bubble bursts.
There is no incentive for those in charge to change their ways.
Zynga (ZNGA) - Hold or Sell? (Originally Posted: 07/25/2012)
I opened a online brokerage account a few months ago with around ~$5k, just test around the waters since I've never invested before. A couple weeks ago I bought some shares of Zynga at around $5 and it just totally crashed today. After-market loss went as deep as 40%.
Do you guys see any future upside to this stock? Advice? Should I sell it at a loss or should I wait?
Double down bro.
What?! Zynga went down?! Noooooooooooooooooooo! There's NO WAY this stock could ever fall, ALL my friends play Words with Friends and some of them even play Draw Something, even some of the girls I know. And my little brother he plays the FarmVille and he loves it I don't know how this happened, does anyone know why it crashed? Did the iPhone market break? I heard something bad happened to Apple but I wasn't sure if that would be bad for the Zynga or if Words with Friends would be enough for it to be really popular?
...looks like I'm gonna have to dump this at a loss, and start over. HAHA.
Next time you make a stock pick, make sure you go through BH's old posts and make sure it's not his most hated company of all time.
Just keep doubling down eventually you will profit... check this article out
http://en.wikipedia.org/wiki/Martingale_(betting_system)
I also don't see a good future for the company, because casual gamers don't pay.
What other stocks have taken such a post-IPO dive so quickly?
Groupon has no competitive advantage, and its model sucks. Most Groupon users aren't repeat customers at a business, and most businesses aren't repeat customers of Groupon.
Lets face it, all this so called new age tech companies are nothing but the same.
A company needs revenues to generate cash flows aftter expenses and working capital shifts. When the firm is unable to even recognize their revenues properly and extract value out of the huge user base, something is very wrong.
On your question, I think it depends on your risk appetite, time frame, other uses of cash and costs of opportunities.
Personally, I like to sell losers instantly if I spot a mistake on my part to avoid holding it for eons just to break even and lose out on inflation and lost opportunities. I will only hold things I believe has a value mispriced. It is hard for others to advise for you on this and only you know your profile the best.
Good luck!
By the way, martingale system wont work here due to the non large duration of investing and price movement here is certainly not random enough.
.
I'm sorry but just after talking to some of the major shareholders today, honestly I think what these guys did in that secondary offering was borderline (if not over the line) criminal. You can cry all you want about insider trading or other white collar, but legally sanctioned raping of the investor base is apparently fine as long as you file it in advance with the SEC. This is an absolute monstrosity of a company, and they knew damn well what was gonna happen to this business. I'm so sick and tired of hearing from the masses about how amazing these "startup entrepreneurs" are and how on Wall Street we're all just a bunch of crooks trying to rape your wallet and adding zero value. What value does Zynga add? These guys and their techy counterparts are the real waste of space.
My boss wants the CEO in prison. Seriously.
Edit: by boss, I mean founder of the fund.
sell that shit
If the majority of the users of any company you think about purchasing is a bunch of people who don't have money or have to get approval from someone else to use money. Do not touch.
The Reformed Broker has a nice little rant about Zynga. Pretty entertaining.
Wish I had shorted it after the IPO, but there was no borrow. How about this: I think it gets cut in half from HERE ($6.61) within 6 months.
Big props to you sir.
Use puts?
Puts price in lack of liquidity in shares
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