Zynga recovery from earnings via /r/wallstreetbets #stocks #wallstreetbets #investing

Zynga recovery from earnings

Right now, we're at the tipping point of a massive COVID-19 wave in the United States. We're rapidly approaching 200k new cases per day and 200+ deaths per day. From New York to LA, more stringent restrictions are being placed on schools, outdoor dining, gyms, and gatherings. In many of these places, outdoor gatherings simply won't be an option: when there's six inches of snow on the ground and it's 10 degrees outside, nobody's going to sit out there with diamond-hard nips thinking "gee this is great we should do this more often". No, these fuckers are gonna head right back inside, order pickup or delivery, and plop their fat asses right back down on the couch. And that's where Zynga comes in.

Zynga's currently sitting at about $8.00. The only reason they ended up this low is because

  1. They posted earnings in that magical period of time when beating your expected EPS would tank your stock, no matter what. Their EPS came in above expected, but revenue just below expected meant that investors were disappointed (even though their revenue was up 46% YoY).

  2. They acquired Istanbul firm Rollic completely through 200 million in cash, but have not yet included the firm's subscribers and assets on their balance sheet, leading to a loss of 122 million for the quarter. This was actually better than their guidance for Q3 suggested, which was a 160 million loss.

  3. People think this pandemic's over. From vaccinations that won't actually start coming to the regular population til 2021 to people just getting sick of social distancing and not seeing their friends, people want this to be over and it's part of why this current wave is so large in the US. People want the pandemic to be over so they think gaming isn't going to be as profitable as it was during the pandemic.

All of these reasons combined ended up dropping Zynga's price from $9.87 on November 4 to $7.95 on November 9 over the course of 2 trading days. That's malarky, and I won't stand for this slander.

Zynga's been big-dicking and acquiring firms through CASH for years, and their subscriber numbers have been absolutely pumping. Even after the spring/summer lockdowns have been easing up over time, mobile gaming usage at Zynga hasn't seen a significant decline: it's actually still increasing, and will continue to do so in the winter. CEO Frank Gibeau says they plan on continuing further M&A, which is going to be huge for building subscriber base (which is the highest it's been in six years) and with their user pay up to 436 million up 55% YoY and user pay bookings up to 561 million up 69% YoY (nice), we're looking a nice cozy winter inside playing a lot of mobile and desktop games.

Bonus Round: Santa's about to cram absolute dicktons of new iPhones down everyone's stockings at Christmas. Going to be huge for mobile gaming. Buy Zynga or Krampus will gobble up your dick for misbehaving.

ZNGA 9.5C 12/11

ZNGA 10C 12/24

ZNGA 11C 1/15

Submitted November 24, 2020 at 10:42PM by TypicalFacts
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