Today is clearly a dumpster fire for ZNGA. One guess as to why is that analysts come in on Monday morning look at who is announcing earnings for the week and start to do their channel checks. In the case of mobile apps it means going onto App Annie and tracking ranks and trends. If they haven't looked at Zyngas for the quarter and then see what is happening they probably were shocked. Anyone who checks these numbers weekly(like me) knows what happened in the 4th quarter for Zynga was really ugly. Now we don't know how their advertising did and I suspect it was good, but it isn't enough to offset the 85% of their revenues which come from in app purchases.
I wouldn't be surprised if we get big news on Wed. at the cc, that Pincus is stepping down again. I'm not trying to start a rumor, it just feels like that scenario. He can't make this company work. Without back to back hit games from DOT and the racing game, it would seem they have to be burning through their cash with all of the employees and nothing new.
It broke 2.12. Got filled another 15k shares. Now you think hegdies all in here at higher 2's don't give a damn about where this may fall? Pink may control 60% of the company but his ego is still too big. The buy back will start again. And if he does not have something for us positive to share then he has given up and looking for a buyer.
It will hold $2.12 probably until earnings. Maybe to have something positive they will pull the trigger on buying back some stock based upon the authorization last quarter. The thing to look for is cash burn. If they do not burn cash the stock will pop. If they eat into the $1.billion it could be a catalyst for a move below $2.12.
I appreciate your perennial optimism in contrast to my dark visions, but ZNGA has zero fundamentals, and there is yet a substantial premium being paid over its dwindling cash assets and net liquidation value. I hazard a guess that this sham company will be no more at some point down the line. Who will purchase a complete failure, and at what price? This can be ZNGA's only salvation, and as the entire market is in deep trouble, fear now increases at a rapid clip, and speculative takeovers will be shunned. ZNGA will break below 200 pennies. Patience serves the shorts well. It destroys the longs, and the chart aptly points out this painful truth.
Sentiment: Strong Sell
Don't be fooled by one more mirage. Short covering rallies do not represent intrinsic demand for ZNGA shares, a critical concern. At some point, and we are close, some big boys will attempt to unload this rubbish and finally admit, "ZNGA was the biggest mistake of my career." Herein, rests a "slight" problem, as the liquidity of this penny stock is atrocious, and any major player will find it very difficult to escape without a major haircut. Volume, as always, is the absolutely key indicator, and the blood will flow like a river when 50 million shares attempt to cross the tape in a single trading session. Thus sprach Zngathustra.
Sentiment: Strong Sell
Brothers and Sisters: I know you might be tempted to hit the bottle or partake of a bit of that smokeable reality from Humboldt County, as it is quite stressful to observe the ongoing ZNGA death spiral, especially when real money is on the line. I only ask that you take note of my illustrious moral example and realize that now is the exact time that the fog between your ears must be lifted. You must be of keen wit and fine manual dexterity so you can push that sell button with precision. It is a deadly mistake to loiter or tarry with this junk stock as Karma Yoga continues to exert its influence. Yes Brothers and Sisters, the hand of God is at play here. You shall reap that which you sow, and you shall know me by my actions, not my words. Swear off the bottle of Jameson and toss the bong in the garbage right now. The persistence of these illusions is astonishing, and many will pursue ZNGA until it is delisted. In the name of the Father, the Son, and the Holy Ghost. Amen.
Sentiment: Strong Sell
It is hard to get the company to trade below this number because there is about $1.20 in cash value and paying $.90 per share for the user base and potential hit game seems worth it to most. So despite the gloom and doom of many this stock has traded very well coming off this bottom.
Why could this earnings be different? Games MAU and DAU are plummeting, a business that is supposed to be a hit machine hasn't even tried to launch a meaningful game in coming up on a year, costs are still way too high, and maybe most important the overall market is very volatile and even a small miss on a day when the market is tanking could break this stock below the $2.12 support.
On the plus side- Mobile gaming is growing and they are the largest of only two options to invest in publically. One hit and the hype will get this soaring. Dawn of Titans is on the horizon(it has been on the horizon too long admittedly). The stock is cheap enough for a takeover to make sense and that hype will be louder this year. Cash burn is minimal and may even be less with last year's cost cutting plan starting to impact the financials. And of the course the cash takes bankruptcy off the table.
Of course I would like the stock to get oversold and buy for a little over cash value, but that won't happen. However I would say that it is not unreasonable to think the stock will close below $2.12 post earnings and then who knows what happens.
still 1.1B in cash, so not worried about long-term prospects here. in an IRA...