Zynga Inc. : Bet on Facebook IPO
By Oscar Salza
Entry price | Target | Stop-loss | Potential |
---|---|---|---|
$8.22 | $0 | $7.39 | -100% |
First quarter’s earnings release showed revenues up 32% to $321 million, but with net loss to $85 million against a one year previous’ net income to $6.5 million. These numbers were result of important investment made by the company. In fact costs for research and development have nearly doubled in one year. Non-GAAP earnings per share decreased nearly 50% to $0.06, but above JP Morgan’s estimates.
The company has been listed since 15th December and was introduced with price of $10 per share. During this period Zynga has seen the heaven and hell in fewer three months. In early March the stock was listed close to $15 per share, for this, the stock lost more than 50% to $7.50. This level has stopped the bearish movement and it is trying a technical rebound. We forecast a strong rebound towards $10, taking advantage from Facebook IPO. We advise attention seems the strong volatility on the stock, and we suggest a stop loss below $7.5.