The two biggest problems with ZNGA for me is the stock above any of my other concerns.
1. They actually floated shares in the market, unlike GRPN, YELP, and SPLK. 2. The stock is in the 10-handle range with a lot of interest.
I believe in the strategy of the company. Ultimately, you pay for future earnings, not short term day to day fluctuations in price. These movements are not driven by anything fundamentally wrong with the company, but merely traders who are looking to go long and short and profit on swings.
ZNGA also has a GRPN problem. They are lumped together with GRPN which is a scam of a company ripe with accounting fraud and heading to zero. But, it is impossible to short GRPN because there are no shares to borrow since no one wants to buy that piece of crap. So, people trade tech 2.0 on ZNGA since they can't do anything with GRPN.
If you own it, like I do, I'd recommend ostriching this stock. You saw the fundamentals of the company last night, you know the business model and growth opportunity. What you don't know are the day to day fluctuations. They are conservative in their approach to generating ad-revenue and are looking to cross promote and expand instead of monetize. We knew that to be true. I believe ZNGA has a good strategy and I think the management of ZNGA believes in making ZNGA a powerful global brand.