Zynga Shares Slip 18 Percent in One Day

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Zynga Shares Slip 18 Percent in One Day

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Zynga's share price plunged nearly 20 percent in a single day following the release of the company's first-ever quarterly financial report.

I don't know much about the stock market but I'm pretty sure that when a company's share value drops 18 percent in a single day, that's bad. And that's what happened to Zynga in the wake of disappointing quarterly financial results in which the company reported significantly increased earning but still posted a GAAP loss of $435 million. That loss was caused by the issuance of $510 billion of "stock-based compensation" to employees that was triggered by the company's December IPO.

Zynga also projected bookings of $1.35 to $1.45 billion for 2012, representing year-over-year growth of about 20 percent, a decent rate but still only half of the 38 percent year-over-year growth posted in 2011. Zynga COO John Schappert said the company's games were built for long-term growth, however, telling Reuters, "That's why we still have the six-most played games on Facebook."

The big drop leaves Zynga shares at just a little over $12, which still represents significant growth over the $10 valuation of its IPO. At one point the company's share price dropped below $9 but had bounced back and climbed to over $14 prior to yesterday.

Despite the slowdown, analyst firm Robert Baird & Co. expressed confidence in the company's long-term positioning, writing in a research note, "While growth has slowed for both Facebook and Zynga, long-term secular shifts in content consumption, along with significant growth opportunities on smart devices from Apple and Google are too compelling to ignore."

Source: Develop

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The expression, "Timber!!!!!!!!!!!!!!!!!!!" comes to mind.

I guess you could say their stock prices went from Dream Heights...

*puts on sunglasses*

...to a Tiny Tower

Couldn't happen to a nicer company.

Well, unless it happens to EA or Ubisoft of course.

Andy Chalk:
That loss was caused by the issuance of $510 billion of "stock-based compensation" to employees that was triggered by the company's December IPO.

WAT WAT WAT WAT

Breaking news: Zynga distributes half a trillion dollars to employees, inflation crashes stock market!

OT: This is interesting. Still, don't think it'll hurt them in the long run!

DVS BSTrD:
Their stock prices went from Dream Heights to a Tiny Tower in just one day!

That is begging for a "YEEEEEEEAAAAAAAAAAAH!!!!!!" moment.

As much as I'd like to see Zynga go down I can't help but feel just a little bad about it given how many people they employ.

That said, next time don't take a job for a company with such shady business practices I guess.

Colinmac93:

DVS BSTrD:
Their stock prices went from Dream Heights to a Tiny Tower in just one day!

That is begging for a "YEEEEEEEAAAAAAAAAAAH!!!!!!" moment.

Better?

Let's have another week of that.

I wouldn't take this is a sign that Zynga is about to tank. It's not uncommon for large companies to see temporary drops in stock price following reports.

That said, Zynga is horrifically over valued (due to social gaming being a relatively unknown investment oppertunity). It's deflation is likely to play out over years rather then months or days however.

HammerIntoAnvil:
I wouldn't take this is a sign that Zynga is about to tank. It's not uncommon for large companies to see temporary drops in stock price following reports.

That said, Zynga is horrifically over valued (due to social gaming being a relatively unknown investment oppertunity). It's deflation is likely to play out over years rather then months or days however.

They are already back up by 4% today. I don't see them tanking for a while. But if the after trading closes prices keep dropping like this then I would expect them to tank after a while

HammerIntoAnvil:
I wouldn't take this is a sign that Zynga is about to tank. It's not uncommon for large companies to see temporary drops in stock price following reports.

That said, Zynga is horrifically over valued (due to social gaming being a relatively unknown investment oppertunity). It's deflation is likely to play out over years rather then months or days however.

One can hope and dream though!

I kid, as much as I dislike them I would be a bit sad if they folded, as a lot of decent people would lose their jobs

FelixG:

HammerIntoAnvil:
I wouldn't take this is a sign that Zynga is about to tank. It's not uncommon for large companies to see temporary drops in stock price following reports.

That said, Zynga is horrifically over valued (due to social gaming being a relatively unknown investment oppertunity). It's deflation is likely to play out over years rather then months or days however.

One can hope and dream though!

I kid, as much as I dislike them I would be a bit sad if they folded, as a lot of decent people would lose their jobs

you call losing jobs, i call fresh meat to hire and mold to make them something better.

Honestly variations that big in their share price is not exactly great news for them; it smacks of their 'real value' being much, much lower than their speculative one meaning that most of this back and forth ,and probably most of their share price, is hot air. As an investor it seems like a risky speculation to take.

Companies like Zynga exist solely on confidence; they have no real assets bar their investors and their large user-base. They could theoretically become worthless overnight. Its not like their IPs have much name recognition outside of being obnoxious skinner-box time sinks and its not like their brand has a shred of credibility, loyalty or real fanbase.

Their games are disposable trash; often monetized carbon copies of older titles or existing hits all done in a small scale 2D way that leaves them as little more than a UI and a micro-transaction store. If their already played out franchises start to wain or their investor credibility goes through the floor (either one could cause the other) they are essentially over. There is little bounce-back for Zynga in its current obnoxious form.

And as i always do in these threads i shall sign off in the traditional way. **Ahem**; Zynga is a bunch of talentless whores and can eat a whole bag full of Cocks.

You never really know how much you hate a company until you cheer at thier stock prices falling.

When i saw this i applauded for a whole 10 minuites.

vrbtny:
The expression, "Timber!!!!!!!!!!!!!!!!!!!" comes to mind.

There are a considerable number of us here who would love to be the one to have wielded the axe.

I need to see more of the long-term trends for this first.
Because Zynga potentially dying is just way too good to be true.

To truly understand what kind of a monster social gaming is, I would ask you to read this: http://insertcredit.com/2011/09/22/who-killed-videogames-a-ghost-story/

Fawxy:

Andy Chalk:
That loss was caused by the issuance of $510 billion of "stock-based compensation" to employees that was triggered by the company's December IPO.

WAT WAT WAT WAT

Breaking news: Zynga distributes half a trillion dollars to employees, inflation crashes stock market!

OT: This is interesting. Still, don't think it'll hurt them in the long run!

Yeah that typo jumped out at me too. I checked the article and the correct figure is $510 million. yay number sense!

OT: I enjoy watching these corporations burn for embracing the casual fad to the detriment of 'hardcore' gamers.

Did nobody read how they were originally valued at $10 per share and are still at $12. I doubt they are worrying.

DVS BSTrD:
Their stock prices went from Dream Heights to a Tiny Tower in just one day!

You have just won the internet. All of it. Ever.

OT: I don't think this is the end of the world for zynga, it's not good for them, but they're not going to crash down to the ninth pit of hell overnight.

Matthew94:
Did nobody read how they were originally valued at $10 per share and are still at $12. I doubt they are worrying.

That is a good point, but you must not put too much stock into Bernoulli's Expected Utility Theory. It was demonstrated that absolute wealth doesn't matter because it lacks reference. If it dropped 18% today, even though it is higher than they started at originally, all anyone can notice is fall. What you see is all there is.

OT: I'm not really surprised that it's dropping. They also took Bernoulli's theory at face value. It follows the general economic theory (alive and thriving today still) that states, "The agent of economic theory is rational, selfish, and his tastes do not change". Tastes change all the time because the vast majority of people are driven by subconscious motives that follow that golden rule, what you see is all there is.

This kind of thing is never good news, but damned if they don't deserve a good hammer to the cherry tomatoes. Hopefully the people who work from them can abandon ship and get some decent jobs.

Atmos Duality:
I need to see more of the long-term trends for this first.
Because Zynga potentially dying is just way too good to be true.

Sadly, it probably isn't. Likely, in fact. But I'm with you. To quote Professor Farnsworth, "A man can dream though. A man can dream."

But hey, who knows. Maybe a bit more of their "dirty secrets" will come to light and the investors will flee from them like Zynga has the plague.

Fawxy:

Andy Chalk:
That loss was caused by the issuance of $510 billion of "stock-based compensation" to employees that was triggered by the company's December IPO.

WAT WAT WAT WAT

Breaking news: Zynga distributes half a trillion dollars to employees, inflation crashes stock market!

OT: This is interesting. Still, don't think it'll hurt them in the long run!

I know billion in the US means something different than countries that use metric system (mainly a thousand millions rather than a million millions), but is a thousand billions a trillion?

Contrary to popular belief stock prices don't actually affect a company beyond share holders whining for a bit.

Colinmac93:

DVS BSTrD:
Their stock prices went from Dream Heights to a Tiny Tower in just one day!

That is begging for a "YEEEEEEEAAAAAAAAAAAH!!!!!!" moment.

DAMMIT! The ONE time I try to hold back! Very well, I shall make the necessary alterations.

shiajun:

I know billion in the US means something different than countries that use metric system (mainly a thousand millions rather than a million millions), but is a thousand billions a trillion?

What the fucking hell are you talking about? A billion dollars is a thousand millions. A million is a thousand thousands. A trillion is a thousand billions. Always has been and it always will be.

Colinmac93:

DVS BSTrD:
Their stock prices went from Dream Heights to a Tiny Tower in just one day!

That is begging for a "YEEEEEEEAAAAAAAAAAAH!!!!!!" moment.

How's this?

I guess you could say their stock prices went from Dream Heights...

*puts on sunglasses*

...to a Tiny Tower

Bahahahahaaaaa, awesome! Hope none of you guys bought shares in this shitbox.

TestECull:

shiajun:

I know billion in the US means something different than countries that use metric system (mainly a thousand millions rather than a million millions), but is a thousand billions a trillion?

What the fucking hell are you talking about? A billion dollars is a thousand millions. A million is a thousand thousands. A trillion is a thousand billions. Always has been and it always will be.

Acrually, It used to be the UK,
1,000,000,000,000= billion (as in Bi- for two)
1,000,000,000,000,000,000 = Trillion (Tri for 3 )
And so forth.

Until it was changed not to long ago

Necron_warrior:

TestECull:

shiajun:

I know billion in the US means something different than countries that use metric system (mainly a thousand millions rather than a million millions), but is a thousand billions a trillion?

What the fucking hell are you talking about? A billion dollars is a thousand millions. A million is a thousand thousands. A trillion is a thousand billions. Always has been and it always will be.

Acrually, It used to be the UK,
1,000,000,000,000= billion (as in Bi- for two)
1,000,000,000,000,000,000 = Trillion (Tri for 3 )
And so forth.

Until it was changed not to long ago

Quite certain it's always been the same unit measure, that doesn't really make much sense...but I'm in the US so...

I wouldn't put too much stock into what that analyst firm says. They're basically hired to predict every possible outcome and pick the most viable one, meaning that they're often wrong enough. It's a bit like gambling really.
But what would you expect? The analyst says: "buy tech-stocks". Woot! What a surpise.
My personal opinion though, is that these figures coupled with Zynga's controversy could cripple them financially.

Edit: Why did I write "hired" like that? Was I high myself or something?

A large amount of Souls have returned to this earth...

OT:

oh damn really?,
wow that must be a real kick in the teeth for those Blokes

Staskala:
Contrary to popular belief stock prices don't actually affect a company beyond share holders whining for a bit.

Indeed. Alarmist investors fear the sky is falling. You hear it constantly, every day.

jpoon:

Necron_warrior:

TestECull:

What the fucking hell are you talking about? A billion dollars is a thousand millions. A million is a thousand thousands. A trillion is a thousand billions. Always has been and it always will be.

Acrually, It used to be the UK,
1,000,000,000,000= billion (as in Bi- for two)
1,000,000,000,000,000,000 = Trillion (Tri for 3 )
And so forth.

Until it was changed not to long ago

Quite certain it's always been the same unit measure, that doesn't really make much sense...but I'm in the US so...

Meh, That's always the way I've been told.
It Goes=
English = American
Million = Million
Millard = Billion
Billion = Trillion
Trillion = Quintillion

And so on and so forth.

TestECull:

shiajun:

I know billion in the US means something different than countries that use metric system (mainly a thousand millions rather than a million millions), but is a thousand billions a trillion?

What the fucking hell are you talking about? A billion dollars is a thousand millions. A million is a thousand thousands. A trillion is a thousand billions. Always has been and it always will be.

Again....in the US. For maaaaaaaaaany people around the world 1000 * million = one thousand millions, not a billion. Billion means two (bi) millions (million). Or million * million, or million squared, hence the two in there. I was just wondering what a trillion means in the US.

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