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Zynga, Inc. Message Board

  • sjcheetah sjcheetah Oct 28, 2012 1:01 PM Flag

    undervalued zynga - good article

    excerpt from the article.
    ---------

    Zynga is sitting on three widely known and popular potential gaming franchises: Farmville, Poker, and With Friends. Each of these titles is well-known, has broad distribution, and an audience at least willing to check out a new iteration on the franchise. For instance, Farmville 2 just garnered 50 million users shortly after its launch. And each of Zynga's potential franchises targets a different audience: Farmville for middle-aged women, Poker for middle-aged men, and With Friends for the lucrative under-30 market.
    in reality, Zynga sits on three potential franchises, each of which could be huge.
    Right now, Zynga's most popular titles are stuck in their existing channels. Farmville and Poker are only available for Facebook users. With Friends games are only available on mobile. Each of these titles could easily go cross-channel, to Wii, Xbox and PlayStation. Why not play Zynga Poker on Xbox Live?
    Building deep, franchise-driven titles for multiple platforms takes time and investment. However, it is a proven monetization model.
    In addition, Zynga's announcement this week of real-money gambling is also potentially lucrative, especially in context of its ability to deliver the gambling audience of its Zynga Poker gaming franchise.
    The technology industry, particularly its intersection with Wall Street, can be very herdlike, and it is hard to shift the herd perspective on companies like Zynga that are in flux. Still, a herd mentality can be an opportunity for clever investors to make a bet against the crowd.
    In the midst of writing this article, I was having dinner with a hedge fund manager in London, who usually invests in things like mines. He had just bought Zynga for his personal portfolio, despite the fact that Piper Jaffray, Credit Suisse, and BMO Capital all downgraded the stock. The pure hedge fund perspective is to bet against the market, especially when the market is not acting on fundamentals.
    And while this hedge fund guy usually invests in physical mines, even he has noticed that Zynga is sitting on a potential gold mine -- one that is definitely worth a whole lot more than nothing.

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