I first said ZNGA was a short when it was trading at $14. Coming up in March, ZNGA will no longer be a “preferred partner” of FB’s and now will be relegated to the peon ranks of a normal “partner.” Currently they really only have two games that are worth anything, Farmville 2 and Zynga Poker, but they still aren’t “game changers.” Don’t get me wrong, they MIGHT meet expectations, but their guidance is going to be awful. None of the ideas they have had to propel them higher have worked, not to mention Pincus is a total sociopath.
Their income statement should be a mess too, considering all of the restructuring costs as of late, to cut costs mind you, but there should be a a large amount of “stock based compensation” that shows up, as they used this to get people to leave their jobs amicably. We shall see, but I have initiated a short on the upgrade by BAC today. I believe this may truly be the beginning to the end for this name.
