Zynga shares dumped on the first day of trading and we’re hearing lots of chatter about people getting short … big time. For now, here are two Wall Street analysts who are bearish on the stock at these prices:
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Sterne Agee analyst Arvind Bhatia
Bhatia placed “sell” rating on the stock with a $7 price target, reported New York Post. This comes in below the $8.50 to $10 expected price range.
Bhatia said, “When you look under the hood, what you see is growth slowing significantly, margins under pressure, and free cash flow is diminishing.” In addition, Zynga’s premiere game FarmVille already seen its peak.
BTIG analyst Rich Greenfield
On Wednesday in a research report, Greenfield suggested that investors should take part in the company’s IPO that creates Facebook games including CityVille and Mafia Wars.
Greenfield said, ”We view social gaming and particularly Zynga’s social games in much the same way – they are a new “cure” for boredom, and unlike TV, social games can be played anywhere on the planet that you have Internet access, while TV requires you to be in your living room – although YouTube and TV Everywhere are changing that. Furthermore, whereas most people watch TV alone or with their family, Zynga connects you to friends and family.”
With Zynga priced at $10, Greenfield added, “We believe its shares offer compelling upside over the coming year. With a significant increase in the pace of game launches having just begun late in the fourth quarter 2011 and expected to continue into 2012, we believe our 2012 bookings forecast of $1.5 billion is achievable and could be conservative.”
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