) will report its fourth quarter results after the bell this
afternoon. While the company
tends to disappoint
investors with its earnings results, Bank of America
upgraded Zynga to Buy
this morning, indicating that the bank has faith in its future.
The upgrade has helped Zynga's stock rise more than six percent
today. The gains could be short-lived, however, if the analyst
consensus proves to be accurate.
According to the
International Business Times
, Zynga is expected to report another loss. CNBC's
is not much better.
is reporting some troubling metrics for Zynga. According to the
site, Zynga now has 137.7 million Monthly Active Users (MAUs). On
December 28, 2012, the company had
270.8 million MAUs
At first glance, it may appear that Zynga lost more than 130
million users in less than two months. That may very well be the
case. However, AppData
the way it reports metrics to correspond with Facebook's (NASDAQ:
) new reporting procedures.
Thus, while it is wholly possible that Zynga just lost 130
million users, it is equally possible that the previous
Facebook/AppData metrics were wrong. That being the case, it
would mean that Zynga's numbers were even lower than what was
reported in 2012.
Neither scenario will provide the company with a positive
outcome. If Zynga's numbers have always been lower than the data,
investor faith could be greatly diminished. Likewise, if the firm
dropped significantly in January, investors are not likely to
have a positive view of the firm.
Several high-ranking executives and developers resigned from
their positions last year. At the same time Zynga
axed more than 100 jobs
terminated 11 games
Despite these layoffs and game terminations, the company
continued with its trend of acquiring
. Investors are likely skeptical of this move, however,
considering how well the company's former hires and studio
acquisitions turned out.
There is hope that Zynga can rebound after it completes its
gambling initiative. There are still a number of legal and
regulatory hurdles to overcome, however, as well as the risk that
larger and more experienced companies will conquer the market
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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