For game developer Zynga's (ZNGA) shareholders, a sale of part or whole of the company would be the best bet now, according to an analysis done by Bloomberg.
The stock has lost about 70 percent of its value since its IPO debut in December 2011 at $10 a share. Bloomberg data shows that the shares of the company are trading at slightly more than one time its one-year forward earnings, the worst valuation in the industry.
Zynga Chief Executive Mark Pincus had earlier remarked that he would not consider a sale of the company. He controls slightly more than half of the voting rights in the company.
Analysts are however of the opinion that a strategic investor at this crucial juncture, would not only infuse fresh funds, it would also mean a revival of sentiments among its investors who have been dumping the stock over the last several months.
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Ironfire Capital LLC told Bloomberg that a sale now cold fetch the company $7.30 a share. Compare that with the current rice of about $3 a share.
A spokeswoman for the company told Bloomberg that the company remained focussed on its sector and to its goal of creating the best gaming products in the industry.
Zynga's tipping point came last month when its second quarter results missed analyst forecasts and gave a bleak outlook for future earnings. It drastically cut its earnings to between 4 and 9 cents a share from the earlier 23 to 29 cents.
The game developer derived a significant portion of its revenues from the games it developed for ally and partner Facebook. However a change in the social network’s search metrics has made it difficult for users to find Zynga's games and play them.
Three of its top games on the site, Farmville, Cityville and Castleville have lost about a fifth of its players since the first quarter of 2012.