This has been one hell of a two month flogging from $5.80 to $3.33 (which is 666 divided by 2). It all reminds me of an extended baptism by water boarding at Guantanamo Bay. The ZNGA longs were warned long ago by the prophet odonnellm66 that fire and brimstone were in store for all those worshipping the false idol ZNGA. So many were blinded by the dollar signs in their eyes, and now they must be turned to pillars of salt, only to be licked by the occasional stray vulture. Even Don Mattrick has adopted the spiritual path. I just saw him earlier this week at the San Francisco Airport festooned in an orange Hare Krishna robe and collecting alms for disgruntled ZNGA shareholders. Don is saved and he still has his $5 million signing bonus. The ZNGA longs are subject to eternal damnation. You have been warned.
Sentiment: Strong Sell
My own broker at Merrill Lynch has recommended that I dump my son's entire college fund into ZNGA commons shares. How could these experts all be wrong? Do you think they already know about a pending hostile takeover? My guess is that Herbalife is about to make some type of announcement. Don't ignore grabapair on this message board. I think he has the inside track.
Sentiment: Strong Buy
This is going to be an interesting battle over ZNGA's rapidly diminishing assets. The ultimate victor will be either Herbalife, Krispy Creme, or Dollar Tree. Dollar Tree's current bid of 99 cents is fully contingent on on the full use of Mr. Pinus' likeness in Farmville Version 3, A Pigsty Backdoor Escape, and that's a possible stumbling block to hammer out a deal. Rite Aid has also expressed interest in the property where the ZNGA Brain Trust is presently located for a future store site. Herbalife is probably the dark horse contender in light of pending SEC investigations, though the company has vast experience with Ponzi schemes. I wouldn't count out Krispy Creme either, and they are thought to have a new game already in the works, CremedeMintville, which sound like a sure winner.
Summary: George Soros and SFlegend are both rumored to be heavy buyers of ZNGA call options. The big question is what becomes of ZNGA's 2000 plus bloated work force which is currently organizing a union in a last gasp attempt to save jobs. Unfortunately, I picture many of them as future Wall Mart greeters or community activists with google glasses. Dollar Tree has expressed no interest in Don Mattrick or the idle employees, focusing only on the hard assets of the company-- the massage therapists and the long string of zeroes and ones in the secret code of Farmville, Version 2. This might be a long weekend for ZNGA speculators. Stay tuned for further developments.
Sentiment: Strong Buy
Another ZNGA roadkill bounce looks highly probable next week. It is a very dangerous trade because the primary trend for ZNGA remains down toward the $3- level. The Nasdaq is currently in recovery mode from the rather severe beating among the momentum players. Of major concern is that Twitter is not participating in the reversal. Trade a ZNGA roadkill bounce only for a few midrange points, and always sell too early with the last points left on the table.
I was always curious about their mysterious chamber on Montgomery Street. After repeatedly observing the nice looking and well dressed Ologists chain smoking at the front doorsteps of their holy edifice, I thought this might be my kind of church. I did watch their 40 minute infomercial and guzzled the provided elixir---some lemon flavored concoction, fortunately not spiked with LSD. Then came the big question. "Mike, are you now prepared for the full audit?" I reluctantly agreed to the procedure and I was led down a dark hallway where I was seated in front of an e-meter and dual canisters closely resembling Campbell Soup cans. Upon grabbing the canisters, I was bombarded with a series of words and phrases. I think it was some sort of test by association. The moderator first uttered, "Farmville, Version 2," and the needle gently swayed. "Don Mattrick." The needle didn't move at all in boredom. "Mark Pinus." The needle briefly maxed out wildly on the scale. "Virtual goods." No response there. "Donkey sex" elicited a mild gyration. Then we shifted subject matter. "Exposed Cleavage" and "Booty Call" caused the machine to violently rattle and hum. Finally came, "Asian Massage Parlor," and I was off the Richter Scale, and the e-meter began to smoke.
Ten minutes later I had the verdict. "Mike you have a hopeless antisocial personality. Our ARC and KRC triangles cannot assist someone with your problems. Your bridge is not to total freedom, but total serfdom. Keep coming back, but just not here. Ever. Sell all your ZNGA shares at Tuesday's open. Stick to Ray Bradbury. L. Ron Hubbard is for the Chosen Ones." I vainly attempted to explain that I adore watching Tom Cruise and John Travolta engaged in Greco Roman Wrestling.
Should I dump all my ZNGA shares this week?
There is a remarkable linkage between the movement in our stock averages and these two currencies. If the dollar moves up against the yen, our markets rally. Should the dollar fade, our markets decline. It has been a very precise predictor for the last eight months. Up to date information on the exchange rates is most conveniently found at the top of the heading on Bloomberg. Like so many things about trading, the yen exchange rate is counter intuitive, because the Japanese Central Bank, very much in the footsteps of our own Federal Reserve, is printing yen like a drunken sailor in a mad effort to stave off deflation. The policy has been penned as Abenomics. One would expect yen weakness and dollar strength, but any longer term chart indicates this is not the case, and that in of itself is highly disturbing. Instead, we are approaching parity where one yen equals one cent, and this is a very important psychological inflection point. Should one cent become worth less than one yen, and we are not far away, all hell will break loose.
Summary: The yen dollar exchange rate is quite useful to short term trade the SPY. ZNGA also follows market trends, but you want to deal with a basket of stocks for this type of strategy. The dollar is like the mad aunt locked in the attic. At some point, she will come downstairs. Meanwhile, our Federal Reserve will fight tooth and nail to keep the dollar from breaking parity with the yen. Unless there is a major military conflict, possibly not all that far fetched, dollar weakness is a long term given. It is the major theme going forward.
Final note: Bitcoin has roared back to life over this long weekend. Why? Do gold, silver, and oil soon follow?
Our government always makes the calculations minus food and energy. It is a crock of mierda. Who cares if the price of touch screen phones has dropped. I can't eat a cell phone, it won't power my car, and it won't heat or cool my house. Look at the price charts for beef, pork, and soft commodities in general. Scary. Now a pound can of coffee is no longer a pound, and this trend of reducing content runs across the board. People are now hijacking trucks, loaded with of all things, lemons. Why does our government perpetrate this lie? It is because if the true state of inflation were published, they must raise interest rates, now near 0% for a saver, and we know what that would do to this farce known as the stock market. Wall Street, the Kosher Nostra, and the banks run this nation. Stock ownership, not industrial production, is now the designated wealth creator with the vain hope that a few cents of these profits will trickle down to the common working man. It's an absolute joke because the middle class is being squeezed out of existence. We are adopting the Mexican model for our society--a wealthy 1% elite, and everyone else.
Employment statistics are also an outright lie. Then number of people who simply dropped out of the work force are astoundingly huge and they are not counted in the official numbers. Real unemployment is 14% or greater. We do know that wages are flat or in decline. The government can't fudge so easily on those numbers.
Summary: The American standard of living is in sharp decline, with the exception of the wealthy elite. The narrow concentration of wealth has grown by leaps and bounds in the last decade, and it's disgusting. We are not a homogeneous society like Japan with smooth group conformity, so you can expect social unrest at some point in the downward spiral. Finally, this pathetic company known as ZNGA is completely reliant on discretionary income. Think about the repercussions.
I'm not buying the prevailing theory that he was a pure psychotic, though he was obviously disturbed. No, he was fully possessed by the devil and his baser instincts, which we all have but tempered by proper socialization, took full control. This young man was extremely articulate, and even a cursory reading of his manifesto demonstrates that fact. You would be hard pressed to find a 22 year old with his writing skills and introspection. He also shows a deep appreciation of natural beauty and landscape. Lastly, he demonstrates an ear for music even if it was within the genre of 1980's pop culture. In light of the slaughter, these are very disturbing contradictions, because they could all have been channeled in an artistic direction. Say what you want about Rodgers, but this kid was no idiot.
Let's see what he has to say about video games, ZNGA's bread and butter. "Of course, while playing these video games, my innocent, happy self knew nothing of the significant role would play during a large portion of my life,...and the sanctuary such games would eventually provide for me from the cruelties of this world. For now, they were just a form of entertainment like any other hobby." This quote is directly from his manifesto.
Summary: These video games are a poison to a young person's developing mind. They are entirely antisocial and destructive. I am not establishing a direct cause and effect in this tragedy, but they are a factor. Recall what ZNGA was bestowing upon our youngsters--Mafia Wars and rot of that ilk.
Final Note: My 19 year old son attends UC Santa Barbara. He lives right there on the Embarcadero del Norte, less than a block away from where the shooting rampage began. Thanks God for protecting him. I am so sorry about all the victims.
The probability looks excellent. Despite a big political shift to the right, Europe was up strongly. The Nikkei is up 1% at the moment. The dollar remains flat/ stable. DOW futures are up. I'll be out near the $3.40 area.
Then the ZNGA death spiral resumes with an intermediate target of $3-. Practice pushing the sell button on your computer because manual dexterity is of key importance. Hesitation can kill you. Keep a close eye on Twitter as well because the stock looks deathly ill and it has become a touchstone of sorts for social byte, though it too might have a 6 hour bask in the sun.
I love this casino even if it is rigged.
ZNGA is like a moth rising to an open flame, so predict the longevity of such events at your own peril. That stated, I would say it is likely to be more than a single day event, but the longer you attempt to milk it, risk increases correspondingly, and this is why a smart short term trader is interested in only quick midrange percentage points, never seeking the whole enchilada. The bottom line is that the fundamentals for ZNGA are horrible. We are talking about a company with zero earnings, and there will be no earnings for the entire calendar year of 2014. This is not to say that the Kosher Nostra cannot push and shove in short order this stock all the way back to $3.60 or higher. That strategy usually works to suck in the ZNGA message board cheerleaders and the irrational behavior thus replicates. It is more beneficial to have very conservative expectations, meet them for a few hours of button pushing, and get the hell out, never regretting the last coins left on the table. Just work with reasonable probability as would any good poker player.
I would also say the friction between China and Vietnam merits very close attention. We have a land grab going on off the coast of Vietnam at this very moment, and China is clearly out of line and the aggressor. Why is this occurring now? It is almost certain there are large oil and gas reserves in those waters and China increasingly views America as weak. The Chinese do not respect Obama and we as a nation are in debt to Beijing in excess of $1.7 trillion dollars.
The volume stinks as well. I'm already out at $3.36, but I had, as Charles Dickens would say, Greater Expectations. I also noticed that Twitter quickly succumbed, and if there was ever a stock long overdue for a dead sparrow bounce, it is Twitter. Look at the carnage on that stock. Such misery, but the owners, as in the case of ZNGA, are filthy rich. The failure of Twitter is a big negative for the entire group of social byte. Watch out below. The ZNGA death spiral resumes, though we will get some much needed hype from the coming conference.
Sentiment: Strong Sell
Yes, I know one ought to focus on the victims, not the madman, but I want to understand how Rodger's mind functioned. His writing is quite enlightening. I'm 2/3's of the way through his manifesto which runs nearly 150 pages. He went through long periods of addiction to virtual realities on his computer, and his particular fancy was World of Warcraft. I can say nothing of that game, but no doubt those on this message board are fully in the know. World of Warcraft must be highly violent. That's a given.
Summary: These virtual worlds are a cancer for our youth, and they only encourage isolation and antisocial behavior. ZNGA churns out the same garbage, though most of it is rated PG. Elliot should have had a simple bicycle, not some hot BMW. He should have taken it for long 30 mile rides along the coast. I would have gladly sponsored him for that activity, and I would find a nice girl to ride with us. That's healthy interaction. Better than any medication. Better than any psychiatrist.
Sentiment: Strong Sell
Especially on a hype stock like ZNGA with zero fundamentals.
Yes, we can expect more push and shove before the pending conference.
No doubt, Don Mattrick will issue some grand announcement.
"Prosperity is just around the corner on Beale Street."
But the shareholders will be singing the Beale Street Blues.
Because this entire sector of social byte is in big trouble.
Even while the averages are at all time highs.
And margin interest remains off the charts.
Next stop is $3-.
Sentiment: Strong Sell
Subjunctive mood--contrary to fact--Let's get the grammar straight.
"If I were short....."
Would you trust a recommendation from someone not able to properly use our beautiful language?
You are one more victim of Farmville, Version 2.
Typos and misspellings are acceptable, and they happen to all of us, but this is a blatant error in mechanics.
I never received an email from the Kosher Nostra notifying me of their intentions, so who the hell is this?
Is Krispy Creme still accumulating shares in preparation for a hostile takeover?
Volume is highly suspect, but I want answers.
I know there are some pros on this board with the inside tract.
Give me a few clues.
Happiness is a warm gun. Bang, bang. Shoot, shoot.
Because there's something in the air
We've got to get together sooner or later
Because the revolution's here, and you know it's right
And you know that it's right.
--Thunderclap Newman, circa 1969
Pete Townsend on bass guitar
One of the very great one hit wonders
Is ZNGA a one dog wonder?
We shall see.
This is what I advise my own son, and I am entirely open with him. He is all too aware of my manifold shortcomings, which I take full responsibility for.
"Do as I recommend, but not as I did."
Yes, there's much hypocrisy involved.
I'm a very poor role model.
You are absolutely correct on one point. The days to cover ratio is a very key figure and ZNGA has moved from 1 to 2.9 over the recent months. I get concerned when a stock has a days to cover ratio above 5 because a short squeeze is a very unpleasant experience if you are caught in that trap. By and large, shorts are the more sophisticated investors because they are skeptics by their very nature and they don't buy the hype from Wall Street or mass media. Shorts are not interested in appearances or false facades except to profit from the mirage. Some of them are cynics as well, and though it is not true, I have been accused of that. I actually believe and embrace the more noble impulses of my fellows. I am an idealist tempered by certain harsh realities, unrestrained greed (hence delusion) being the most important one in the stock market.
Summary: ZNGA's days to cover at 2.9 does not rattle my nerves. It remains a contrarian position, and you are not tooting your horn on a bandwagon, at least not yet. Keep in mind that the average broker seldom suggests shorting a stock. They want you to buy hand over fist. First of all, the theoretical losses in a short position are unlimited and a client can be destroyed. More importantly, the brokerage industry is in bed with the stocks they underwrite, so their self-seeking policy is not to rattle the feathers. You might get a hold rating, but seldom an outright sell. ZNGA remains a high probability short to at least $3-, but the proof will be in the pudding. No, it will be in your ability to eat the pudding.
Sentiment: Strong Sell
I am quite interested in language, ours and others as a result of wandering the globe some years. Music is my other love, and it is just the other side of the same coin because good language is music. I am a very mediocre guitar player and rhythm inspired. Song lyrics fascinate me and it is a very difficult art form, though it first appears easy. My favorite tune lyrically at the moment is Gentle on My Mind. John Hartford wrote it, but it was made popular by Glen Campbell. The song is a highly polished gem with strong melancholic qualities, something the greatest songs generally have. I'm also on a Sandy Denny obsession at the moment. Try listening to her masterpiece, Who Knows Where the Time Goes, the original version with just her guitar and no accompaniment. She was one more of those dope fiend alcoholic types, and dead at age 31.
I have no expertise on BKE, but categorically I would never bet with the shorts on that baby, not with 18 days to cover. Curiously, this stock has a very long history of high short interest, but no one has become rich on either side, as it has remained in a 10 point trading range for some time. Why get involved with such uncertainties when the field is so ripe for the short sellers, and much of the prime cuts are within social byte, an area bloated with hype, but not earnings.