Zynga (ZNGA -9.2%) ended an ugly day trading 20% below its IPO price. Aside from Playdom's (DIS)...

Zynga (ZNGA -9.2%) ended an ugly day trading 20% below its IPO price. Aside from Playdom's (DIS) unveiling of Marvel: Avengers Alliance for Facebook, there wasn't any noteworthy news to move shares. But bearish opinions are easy to find: Dave Thier argues Zynga's problem is that rising customer expectations force it to develop more expensive games to generate the same amount of revenue, all while competition grows.

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Comments (4)
  • screamin187
    , contributor
    Comments (294) | Send Message
    High customer expectations for the same price while competition increases? That sounds just like NFLX, though NFLX was up over 10% on the same day. Short NFLX or long ZNGA?
    9 Jan 2012, 06:38 PM Reply Like
  • Modernist
    , contributor
    Comments (2083) | Send Message
    ZNGA has comfortable margins. I suggest reading Dave Thier's article for yourself. Long ZNGA
    9 Jan 2012, 08:21 PM Reply Like
  • Poor Texan
    , contributor
    Comments (3527) | Send Message
    Will our kids ever get their noses out of games and take a breath of fresh air? If they do, bye bye games.
    9 Jan 2012, 10:18 PM Reply Like
  • DieHardInvest
    , contributor
    Comments (2) | Send Message
    As much as I hate Zynga and its products, this stock is way underpriced right now. We are seeing the bottom of a valley (or close to it) with the 8.00 share price today.


    This is a good opportunity to buy a cheap stock that could deliver substantial returns (25%+) in the very short term. I think the downside risk is relatively low, as I do not see the share price dropping beneath 7.00, at least in the short term.
    10 Jan 2012, 11:44 PM Reply Like
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