Zynga Inc(NASDAQ:ZNGA)
is experiencing a worst day with a loss of 39% since the company went
public in December 2011. Investors are winding their positions and heavy short
selling is witnessing in the stock after the online game provider reported
dismal quarterly earnings and trimmed its full earnings outlook, stating that
users on Facebook Inc(NASDAQ:FB) have been switching more to mobile, which has slow down its gaming users. The
company generated 100% of its revenue from Facebook’s platform. Recently, the
company had announced to launch its own platform, but it is still under beta
version and is yet to monetize.
Can ZNGA Bounce back After Today’s Fall? Get Trend
Analysis
The company just earned a penny on an adjusted basis,
lagging analysts’ forecast by 4 cents, while revenue of $332.4 million also
missed the Wall Street target of $344.12 million. In fact, the company trimmed
its earnings estimate for the year to 4 and 9 cents a share, drastically reduced
from its previous guidance of 23 to 29 cents a share. As a result, shares of
ZNGA fell another 38% to $3.14 after briefly hitting record low of $2.97. It
would really be a tough call to make any investment decision on the stock after
today’s plunge. But the trend could be continued and ZNGA may fall further. So
hold your breath before the stock stabilizes.
Poor quarterly number from Zynga is also creating fresh
tensions for Facebook Inc(NASDAQ:FB),
as the company’s 15% of total revenue generated from Zynga’s revenue as a commission
on gaming service it provides. As of yesterday, investors and analysts were
talking about the ad revenue to be closely watched, now they also need to watch
the company’s other revenue, if that comes lower it would really be a tough for
FB to hold at current market price and the stock may hit record low. The
company is scheduled to report earnings today after hours. Analysts are
expecting 12 cents a share on revenue of $1.15 billion. Shares of the company
have lost 30% from its $38 IPO price in just two months. So needs to be bit cautious
ahead of earnings.
Get Instant Updates on FB's Earnings After Market Close Today, Click here
On the winning side, Akamai Technologies, Inc.(NASDAQ:AKAM)
is clearly a big gainer in today’s session as the company has witnessed lower
profit, which came ahead of analysts’ target. The company reported a 8% fall in
its second-quarter net income to $44.2 million, or 24 cents per share, from a
year ago profit of $47.9 million, or 25 cents per share. On an adjusted basis,
the company earned 43 cents a share, ahead of analysts’ target by 6 cents. Revenue
during the quarter came in at $331 million, up 20% year over year from $277
million, again topping analysts’ target of $326 million.
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Analysis
Shares of AKAM were up 22.51% to $34.61.
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