The bad news is that they are spending any money on acquisitions at all because that lowers the likelihood that they are grooming themselves for sale. I had hoped the news of recent layoffs and the news of John Doerr joining the board meant they were wising up and were planning to prep themselves for sale to attempt to deliver some nominal value to shareholders. But, as usual, they are flopping all over the place grasping at straws, still trying to decide whether they are in the sin business (RMG) or just cranking out more little games for kids and bored housewives. Of course the message is they intend to dominate both, which means their priorities are divided and will ultimately dilute their efforts, watch their position in games decay and be stopped at the door in RMG by entrenched veteran gambling businesses. The fact is, most of their value is in cash and real estate which gives them the same profile as a small regional bank.
All of the fuss about their little pile of 1.whatever billion dollars ($1.2B) is only going to get them so far. Unless they find a way to generate revenue and profits really soon, they are going to be DOA. Think about it bulls. You keep repeating how they are being valued at just a little more than their cash and RE assets (price/book is 1.08 as of today). You can say that makes them extremely undervalued, or you can read that as all curious parties think their business currently has only nominal intrinsic value because they are generating no significant monetary growth. Growth companies demonstrate growth. They aren't doing that, ergo, they are not a growth company. They, and you, think they are, but where is the growth? Don't talk about their placement on the game popularity leaderboards, talk about growing revenue and profits. And don't try to snow anybody about how the gambling business has 100B potential market. What relevance is that if they don't own any of it? Because they wish really hard? Please.
Next, are you Focking crazy? Zynga has generated in excess of 3 billion in sales in its short public life. Now for sure they have been a disaster to shareholders and they have not been consistently profitable but why on Earth would they stop running a business that brings in a billion dollars per year while they try to pivot?
The very suggestion that they should stop the "kiddie and housewife" game business while they go after RMG is simply a incoherent thought.
And while that number is not in dispute it's also misleading. How much has been spent since the OMGPOP disaster for which they have already taken the write down?
The company's shifting strategy moved away from large acquisitions some time ago and the past number is not relevant to anything other than Cory Johnson's latest kick of dirt into the face of Mark Pincus.
As an example if Zynga were to do no further acquisitions for the rest of time and went on to succeed in RMG the 310 million number is still correct and still the past not the future or even the present.