Interesting action off the IPO. The Fast Money crew like this one. Kind of a backdoor Facebook play, as they do the vast bulk of their business on Facebook. Anyway, it's trading right at the IPO price, which is kind of surprising to me.
http://finance.yahoo.com/news/Zynga-falters-debut-sheds-reuters-1904414743.html The company, which competes with Electronic Arts sold 100 million shares of Class A common stock at $10 per share in the IPO, roughly 11 percent of its shares on a diluted basis, at the top end of the $8.50 to $10 indicative range. The IPO values Zynga at $8.9 billion. In November, the company had been valued at roughly $14 billion, according to an internal estimate in a regulatory filing. Another ZNGA thread here: www.elitetrader.com/vb/showthread.php?s=&threadid=232846
I really missed on this one. I thought it would at least hold the issue price, but it didn't. Pretty embarrassing for the underwriters and the insiders who were selling. The argument against it is that the company is valued at something like three times Electronic Arts, the biggest game developer. The counter is that ZNGA has a huge interactive social media presence that no competitors have and which they have barely begun to monetize. It will be interesting to see how this plays out.
Zynga has had it greatest growth over the years it wasn't a public traded company, the time is to sell not buy, can zynga jump to $10 or $15 or $30 maybe, but long term growth is over for this company, once the social networking buzz fades and facebook is forgotten and millions start to leave the site for another social networking trend you will notice zynga losing a lot of those one time hard core gaming farmville fans they once had. Lets see facebook growth is peaking out which means along with their growth peaking out zyngas growth will be peaking sometime in the next 12-24 months, so in reality this company will be lucky to even be worth over a Billion in the next 3-5 years. Growth is peaking in facebook and zynga....its a bit late to get into these names.
Once people start to leave facebook, which they will, zynga will lose millions of online players, how long can you play those games for, I have never even played any of those games, I have no clue why people are so interested in them. Wait I forgot I'm not even on facebook....
I dumped all my ZNGA today. I would have sold friday but I was out of town. It ran up to a new high then sold off hard.
How do you guys feel about znga now?? btw I am still long and have been for a while taking profits and buying back, with yelp IPO tomorrow could be up another 10%, broke 52wk hi today already....