Tag Archives: znga

Zynga Stock Getting Dogged By Declining User Base

Once-hot Zynga ( ZNGA ), a maker of mobile and social video games, saw its stock crater to a new low Thursday after reporting that its user base continued to shrink last quarter. Zynga went public in December 2011 at 10 and reached as high as 15.91 in March 2012. It initially rode on the coattails of Facebook ( FB ), providing games like “FarmVille” for the booming social network. But its fortunes turned south after Facebook ended a partnership with Zynga. Zynga stock was down 15% to 1.80 in late-afternoon trading on the stock market today . Earlier in the session, shares hit an all-time low of 1.78. Zynga, named after the founder’s dog, is certainly acting like one. Late Wednesday, Zynga said it broke even in the December quarter on sales of $182.1 million. Earnings were in line, and sales were better than the $178 million expected by analysts polled by Thomson Reuters. Zynga’s sales were down a smidge from $182.35 million in the year-earlier quarter. But Zynga reported a drop in monthly active users for the sixth consecutive quarter. “Users continue to flee,” Pacific Crest Securities analyst Evan Wilson said in a research report Wednesday. Zynga had 18 million daily active users and 68 monthly active users in Q4. Both numbers missed consensus views. Analysts were expecting 18.7 million daily active users and 74.8 million monthly active users. “A successful turnaround effort needs to include stabilizing the user base, in our view, and we are still not confident Zynga has the (game) slate to do this,” Wilson said. He rates the stock as sector weight. Zynga has an ambitious slate of 10 games to be launched this year. They include new social casino and matching games, as well as racing game “CSR2” and action strategy game “Dawn of Titans.” However, Zynga has “consistently overpromised and underdelivered,” Wilson said. Fox Business Network on Thursday put Zynga on its “ death watch .” Baird analyst Colin Sebastian on Thursday reiterated his neutral rating and price target of 3 for Zynga stock. Sebastian noted that the company is likely to face heightened competition ahead from well-capitalized video game publishers like Activision Blizzard ( ATVI ) and Electronic Arts ( EA ). “EA has acquired a number of social game companies and is in the process of porting a number of its legacy franchises from consoles onto emerging platforms,” Sebastian said. “We also believe that Activision is rethinking its online and social strategy, and will come to market with new online games, and may also pursue acquisitions of game developers.” Activision is in the process of purchasing mobile game publisher King Digital Entertainment ( KING ). RELATED: Taylor Swift Video Game In Glu Mobile Investors’ ‘Wildest Dreams’ .

Taylor Swift Video Game In Glu Mobile Investors’ ‘Wildest Dreams’

The rumored bad blood between pop stars Taylor Swift and Katy Perry soon will spill over into the mobile video game arena. Mobile game publisher Glu Mobile ( GLUU ) announced late Wednesday that it has partnered with Swift to develop a smartphone game set for release in late December. The pop star, known for such hit songs as “Wildest Dreams” and “Blank Space,”  will join Glu’s growing celebrity roster, which includes Perry, Kim Kardashian and others. Swift reportedly wrote her song “ Bad Blood ” about her fallout with Perry. Shares of low-priced small-cap stock Glu were up 31%, near 2.60, in early afternoon trading on the stock market today . Glu announced its deal with Tay-Tay at the same time it posted Q4 earnings that beat analyst expectations . San Francisco-based Glu earned 2 cents a share excluding items on sales of $57.9 million in the December quarter. Analysts polled by Thomson Reuters expected Glu to lose 3 cents a share on sales of $50.5 million. On a year-over-year basis, earnings per share tumbled 82% and sales fell 24%. Glu Mobile CEO Niccolo de Masi attributed the Q4 outperformance to continued strong results from its top games – “Kim Kardashian: Hollywood,” “Cooking Dash 2016,” “Racing Rivals” and “Deer Hunter 2016.” Meanwhile, “Katy Perry Pop,” launched Dec. 17, was widely seen as a flop, blamed on poor game design. Other upcoming celebrity video games from Glu will feature pop singers Britney Spears and Nicki Minaj, reality TV stars Kendall and Kylie Jenner, and chef Gordon Ramsay. By signing Swift, Glu has effectively locked up the market for games featuring high-profile female celebrities, Cowen analyst Doug Creutz said in a research report Thursday. “At the very least, we believe Glu has eliminated any possibility of real competition in the genre for the next several years,” Creutz said. Last month, Glu agreed to take a minority stake in Plain Vanilla Corp. , based in Reykjavik, Iceland. Plain Vanilla is the developer behind the globally popular game “QuizUp.” Glu also has an option to acquire the company at a pre-agreed price. The competitive landscape in mobile gaming is beginning to shake out, de Masi said on a conference call with analysts. “New company formation has slowed dramatically as venture capital has dried up,” he said. “Over the next 24 months, I anticipate significant consolidation and the emergence of fewer, bigger, stronger global firms.” In November, Activision Blizzard ( ATVI ) agreed to buy “Candy Crush” mobile game maker King Digital Entertainment ( KING ) for $5.9 billion. Other major players in the mobile game market include Supercell, Machine Zone, Rovio, Electronic Arts ( EA ) and Zynga ( ZNGA ). Image provided by Shutterstock .

Twitter Following Yahoo Down The Path To ‘Ex-Growth,’ Downgraded

Twitter ( TWTR ) stock sank again Tuesday after getting downgraded by Stifel analyst Scott Devitt, who warned of sluggish growth in 2016 for the social media site. Stifel lowered its rating on Twitter stock to sell from hold, but it maintained its price target of 14. Twitter stock was down more than 9% in afternoon trading in the stock market today , near 16 and near its all-time low of 15.48, touched on Jan. 20. Twitter stock has struggled below its IPO price of 26 since mid-December. Twitter stock is down 37% from its IPO price and is down 57% in the past 12 months. “We think the company will be challenged to reach its near- and long-term financial expectations given its current usage trajectory,” wrote Devitt in an industry note late Monday. Due to “a lack of product innovation and limited sense of urgency,” Devitt said, “Twitter’s monthly active user growth continues to slow and is at risk of turning negative in 2016.” “If Twitter is in the early stages of following a similar path to ex-growth as AOL ( AOL ) and Yahoo ( YHOO ) experienced before it — as seems to be the case — then there is likely more downside for Twitter common stock,” Devitt said. “More recently, Groupon ( GRPN ) and Zynga ( ZNGA ) were notable Internet companies that quickly rose to prominence followed by a rapid decline in their share prices. Although these companies are not at Twitter’s scale, both still have 50 million users and once had many more.” Facebook ( FB )continues to generate over twice as much ad revenue per U.S. monthly active user as Twitter, said Devitt, and Facebook users spend 10 times as much time on Facebook’s site than Twitter users spend on Twitter. Twitter has long been rumored as a takeover candidate. Besides facing competition from Facebook and others, Twitter is struggling to expand its user base. It has launched programs to reel in “logged out” users who visit Twitter’s site but don’t have accounts of their own, making them less coveted by advertisers. Twitter posted Q3 earnings and revenue that beat Wall Street views, but its user growth slowed and its Q4 sales guidance missed analyst estimates. For Q4, Twitter guided revenue of $695 million to $710 million, up 46% at the midpoint, but analysts had modeled $739.7 million. Analysts polled by Thomson Reuters expect Q4 EPS ex items of 14 cents, up 17%. Twitter is set to report Q4 earnings after the close Feb. 10.