Friday, July 27, 2012

Zynga Inc (ZNGA) shares extend losses to all-time low on analyst downgrades

Shares of game-maker Zynga Inc (NASDAQ:ZNGA), extended losses on Thursday, the stock price plunging nearly 40 percent, with analysts downgrading the stock on uncertainty over its continued profitability.
On Wednesday the company had turned in a poor performance and holding out little prospects of an immediate recovery in the near future.  It cut its full-year guidance after reporting a loss and revenue below expectations. Analyst at Goldman Sachs lowered its investment rating on the stock to Neutral from Buy.
Can ZNGA Bounce Back, Get Free Trend Analysis
The maker of the popular Farmville game, which relies on Facebook users, has been facing problems recently with the No. 1 social network’s changes to its site making it difficult for users to search for existing games.  The new format directs subscribers to newer games and away from older ones such as Farmville, which contributes about 15 percent to Facebook’s revenues.
Analysts however feel that it is not so much to do with Facebook’s changes as a shift in consumer preferences to mobile gaming from PC games. Cowen maintained its Neutral rating on the stock while Baird trimmed its price target to $6 from $13, while maintaining its Outperform rating.
Zynga's stock fell $1.90, or 37.5 percent, to close at $3.18 Thursday, the lowest since Zynga went public in December and down nearly 70 from its IPO price of $10.


  1. It has nothing to do with a shift to mobile gaming; mobile games, in my experience, tend to suck. The problem is that Zynga rehashes the same crap in each game and makes objectives that are impossible to be completed without spending money. The people that actually DO spend money supporting the game are turned off by having to continually shell out more and more coin to end up with pretty much nothing back; only in the land of Zynga can you spend $500 and end up not getting the premium reward. Additionally, the games are so old that they are riddled with cockroaches and spiders and ants (oh my!), and developers who previously put in the "feature" that is causing the bug are nowhere to be seen, having moved to the next project, while the new programmer does his own thing and the bugs remain. They don't know how to fix problems in their software. That is why they are losing customer attention.

  2. when analysts says that due to facebook changes we are unable to to find our games thats just insane! how is it hard to find games within facebook? you can even find it as soon as you open your browser!!!
    it has nothing to do with that, its all zynga's treatment and way of doing business since the ipo.
    they made so many changes to all the games that made it almost 100% need to play real money to achieve simple goals by making it difficult or almost impossible to even finish it.
    the mere goal of showing profit within 6 months of ipo is the wrong move they have done. its plain boasting and arrogance. as a player when i dont get to even have a chance to finish a certain quest or goal i will stop playing. of course i may go back again next week to try again because there's ways to get what you miss but when it happens over and over again you just stop playing. just like now i even barely go to facebook anymore. and they didnt lose just one player the friends im playing with will also taste the bitterness of loosing your playing friends hence it becomes a chain reaction that zynga believes we will just try to start playing a diff games but i know for myself thats not the case and see it in many people that when one stop playing the rest kinda follow because the games they have normally dependent on friends/neighbors to achieve all those hard goals nowadays. just my 2 cents

  3. yeah..right they have made it quite tough for players. Also, the key problem for them is that they rely on Facebook. How long would they continue their business like that. Zynga clearly lacks a definite money making strategy, otherwise it would be difficult for them to make investors happy and addicted share trading :P


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