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odonnellm66 406 posts  |  Last Activity: 13 hours ago Member since: Jan 17, 2012
  • What does a quality ten year bond, AAA corporate or a US Treasury, pay in yield? For a saver, it's pretty discouraging, not even staying even with the rate of inflation, which is much higher than the official government figures. I use the term "quality" very loosely because even these highly rated bonds are highly susceptible to any increase in rates. In other words, when rates rise, just a question of time, they will be heavily discounted. My point is that the real action has not been in quality bonds, but the high yield junk sector. The public has opted out of any proper sense of risk assessment in favor of return. Many of the bond funds they invest in are highly leveraged. The mantra, borrow short and go out on the long end of the yield curve, has worked remarkably well over the last five years. That is about to change. Right now margin calls are hitting a few hedge bond funds specializing in Fannie/Freddie bonds wit high repo leverage.

    Summary: If interest rates were to even slightly normalize to historic numbers, we would have major fireworks in our financial markets. The garbage bonds would be hit first. Then the garbage stocks come next. Yes, Dorothy, that garbage is ZNGA.

    Sentiment: Strong Sell

  • Reply to

    ZNGA's Monday Mystery Meat Question:

    by odonnellm66 Aug 11, 2014 11:10 AM
    odonnellm66 odonnellm66 Aug 11, 2014 1:24 PM Flag

    ZNGA's revenue concentration (70%) rests in two games, so in many ways, its current state is not much different than KING. Yes, there is much hope for a more balanced and diversified menu at some vague point in the future. It's not here today, only a rather lose promise sometime in 2015. When the averages decline in the next 90 days, the speculators, and that's all ZNGA is but a wild speculation, will become first impatient, and then frightened. Meanwhile, Dr. Don and his 2000 man crew will bleed this company dry. $1.99 ZNGA coming.

    Sentiment: Strong Sell

  • Reply to

    ZNGA's Monday Mystery Meat Question:

    by odonnellm66 Aug 11, 2014 11:10 AM
    odonnellm66 odonnellm66 Aug 11, 2014 11:28 AM Flag

    I would be very careful about using Microsoft as an example because that company, and its product does have actual utility, recently slashed its workforce as a cost containment measure. ZNGA could be gone tomorrow, and few would note the obituary, other than the employees, the shareholders, and a few gaming addicts. No, ZNGA is the Atlantic City of social byte.

    Sentiment: Strong Sell

  • Please describe in detail what ZNGA's bloated 2000 person work force accomplishes on an average day. For the pittance of new infantile pursuits which ZNGA has cranked out since Dr. Don took over the phantom ghost ship, this question baffles me to no end. What if 1000 employees were axed, and no one could detect any difference in output? Now consider the bureaucratic infrastructure required to keep all those 2000 employees well greased. Like a government agency-- the Department of Motor Vehicles comes to mind-- ZNGA has its Human Resources Department. Then there's the in house gourmet restaurant, the ZNGA playhouse, the company gym, and the massage therapists. Amazingly, Tesla, a company whose product is clear to grasp, has 3000 employees, or only 1000 more than ZNGA. I understand what the Tesla employees do on any given day. The product speaks for itself. The ZNGA Brain Trust is the Winchester Mystery House of social byte.

    Summary: ZNGA is too big to succeed. Layoffs, not earnings, are pending in 2015.

    Sentiment: Strong Sell

  • Let's include the company building, but in the midst of a decline in the averages, it would be a slight stretch to say that building is worth $500 million. I'll allow that for the moment. ZNGA's cash and its building total approximately $1.25 billion in my book, and that's being very liberal with the math. Keep in mind that this company will continue to bleed red over the foreseeable future, expending its cash basis, because cost of operations exceeds revenue. Dr. Don's obscene annual compensation alone is $56 million. I'll let you value the so-called intellectual property (Draw Something revisited?), that long line of zeroes and ones.

    Summary: There remains $1 billion in downside market cap risk in ZNGA shares. We will see $1.99 ZNGA.

    Sentiment: Strong Sell

  • The incessant drive for yield has thus encouraged massive speculation in all kinds of junk--junk stocks (ZNGA, TWTR, AMZN) and junk bonds, now euphemistically referred to in the trade as "high yield bonds."
    The sub-prime crisis of 2008 has transferred directly to gambling on junk, and we have the Federal Reserve to thank for this coming train wreck.

    Summary: When this market cracks, you will not be able to sell this junk fast enough. Liquidity will fade and he price adjustments will be enormous, well beyond the decline in the major averages as a whole. The blood will flow thick in the streets. Meanwhile, await ZNGA profitability in 2015. Or is it 2016 or 2017? Fool's gold.

    Sentiment: Strong Sell

  • Now that's one fascinating game, and it teaches much about mathematical probability, an indispensable skill for stock traders, modern and gray haired alike. I do have this slight problem with my six year old Samsung flip phone. I can't play Farmville, Version 2 on it. I have also never sent or received a text message in my life. I still do important writing on a 1957 Smith Corona typewriter. Yes, I am a dinosaur, and quite happily so.

    Sentiment: Strong Sell

  • odonnellm66 odonnellm66 Aug 8, 2014 1:06 PM Flag

    True, but this is all about the unfolding of Karma Yoga, so there are philosophical aspects to this trade. It is the hand of God at work.

    Sentiment: Strong Sell

  • It is not any great wonder that some players are now fighting tooth and nail to be excluded from that infamy. It's not the kind of advertising you want, and thus we get the temporary bounce off of $2.70. This is all highly reminiscent of a few weeks back when there was a fervent battle to prevent ZNGA from falling below critical technical and psychological support at the magic figure of $3-. We know how that turned out. $2.70 won't hold either.

    Sentiment: Strong Sell

  • Reply to

    ZNGA NFL?! What a joke

    by sdawg1105 Aug 8, 2014 12:23 PM
    odonnellm66 odonnellm66 Aug 8, 2014 12:38 PM Flag

    You are exactly correct. That's why ZNGA postponed earnings to August 7. The contracts with Tiger Woods and the NFL likely had not been signed, and without this hype public relations ploy, we would be looking at $2.40 ZNGA right now. This is one more futile effort to buy time for this bleeding pig. It is doomed to failure. Karma Yoga baby!

    Sentiment: Strong Sell

  • The very best you can hope for is that ZNGA remains stable for the next six months, which means in the most ideal scenario, it is dead money., and ZNGA pays no dividend. Here's the big difficulty with the notion of price stability. Tops are now in place for all the major averages. The path of least resistance is down and down well beyond a normal 10% market correction. I anticipate panic selling at some point over the next three months. The laggards, companies unable to post profits, will be dumped in droves. We will see $1.99 ZNGA. Depending on the speed with which ZNGA is expending its cash base, it could be even worse.

    Sentiment: Strong Sell

  • By the way, give me the actual cash position of this outfit, because I see numbers all over the map. ZNGA has spent like drunken sailors on acquisitions and they are currently bleeding to cover the daily cost of operations. This stock remains in big trouble.

    Sentiment: Strong Sell

  • Lead analyst, Patrick O'Leary, sited the following structural problems:
    1. Revenue is in a free fall.
    2. Active users are in a sharp decline.
    3. ZNGA is a non-profit organization.
    4. All of the so-called products are fads.
    5. The Kim Khardashian factor is missing.
    6. Why pay premium for freemium?
    7. Dr. Don's obscene compensation alone will bleed the company dry.
    8. The Kosher Nostra is dumping their shares, including Stevie Cohen.
    9. ZNGA could eliminate 1000 employees and no one would notice a change in output.

    Sentiment: Strong Sell

  • Call me when this rubbish is trading at $2.50. Meanwhile, paint some more lipstick on this pig.

    Sentiment: Strong Sell

  • I'll Tweet this in a few moments. I'm just letting you sell first.

    Sentiment: Strong Sell

  • This explains why his stroke has been errant with his putter in recent tournaments. His spokesman announced, "Tiger has been placed in quarantine at an undisclosed Florida facility. Mr. Woods is on a restricted diet, and he is slowly being weened off of his Grand Slam addiction. This is a personal issue not thought to effect his strategic alliance with the ZNGA Brain Trust.

    Let us pray for the recovery of both Tiger and ZNGA shares.

    Sentiment: Strong Sell

  • odonnellm66 odonnellm66 Aug 7, 2014 11:12 PM Flag

    Did you yet receive the Spandex low trim shorts I mailed you last week? Yes, the ones with embroidered hearts and cupid arrows. You should now prove quite popular at the gym.

    Are you prepared for a bloodbath in the world markets? It's coming. Your above idea makes much sense, but there must be buyer demand for those calls in order to make good money. Who in their right mind purchases ZNGA calls at this stage of the game except as a hedging strategy?

    Sentiment: Strong Sell

  • Lobster red all over the world as of this moment. Tokyo down 2%. Hang Seng down also. FTSE and the DAX looking like they want to sell big time. Putin is rattling his saber, and I believe he will enter the Ukraine. That sends world markets down an immediate 10 to 20%. European banks are facing a crisis, similar to what we saw here in 2008. This entire scenario is starting to look biblical. You are nuts to be speculating in a penny stock like ZNGA at this time. The first trading day after the disastrous ZNGA lack of earnings report looks to be nasty, though we can definitely expect the Federal Reserve to be active overnight in our futures in a desperate attempt to prevent mass contagion. Systemic market risk, baby! For those not adverse to high risk and high reward, take a look at FAZ, but it is only for those with damn near impeccable market timing, which means very few. It is an excellent day trading vehicle for those with the necessary skills and a bit of luck. We are in for great excitement over the next 90 days. It will be very painful for most, but a few will become quite wealthy. We are looking at a 600 point down session on the DOW shortly. It could even occur tomorrow.

    Summary: ZNGA is high risk, no reward. This is a time to be short the market, and especially short garbage stocks.

    Sentiment: Strong Sell

  • Business Insider; August 7, 2014
    Article: Record Withdrawals From High-Yield Bond Funds
    I already addressed this topic some time ago.
    Let's get ready to rumble.

    Summary: Junk bonds and junk stocks like ZNGA are about to be vaporized. Is risk off or on?

    Sentiment: Strong Sell

  • I don't know the exact answer to that question but his pumping of the stock just before this disastrous lack of earnings report is highly suspicious. Read my text on the subject: Tribal Money Flow Patterns and Tsunami Wave Analysis

    Sentiment: Strong Sell

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