Why Zynga Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of social gamer Zynga (Nasdaq: ZNGA  ) have jumped today by as much as 17% after the company reported third-quarter earnings.

So what: Revenue came in at $316.6 million, slightly higher than its previously provided guidance. Non-GAAP net loss was $361 million, or $0.00 per share after rounding. Bookings, an important precursor to future revenue, fell to $255.6 million.

Now what: Some analysts think Zynga's darkest days are over, and shares trade at depressed levels with the company's cash position representing nearly 90% of its market cap currently. Zynga is also implementing a cost-reduction program that entails killing off certain titles and laying off 150 employees. It has also authorized a share repurchase program of up to $200 million.

Zynga's post-IPO performance has been dreadful, and investors are beginning to wonder if it's "game over" for this newly public company. Being so closely related to the world's largest social network can be a blessing and a curse. You can learn everything you need to know about Zynga and whether it's a buy or a sell in our new premium research report. Don't even think about picking up shares before you read what our top analysts have to say about Zynga. Click here to access your copy.


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