Why Zynga Shares Zoomed Again

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 game developer Zynga (NASDAQ: ZNGA  ) popped 10% today on continued optimism over its recent CEO shuffle.  

So what: The stock jumped yesterday after Zynga tapped Don Mattrick, president of Microsoft's Interactive Entertainment Business, as its new CEO, so the ongoing rally suggests that the move might be a real turning point for the beleaguered company. Of course, former CEO Mark Pincus -- who founded Zynga in 2007 -- will remain chairman and continue to own a controlling stake in the company, so there's still plenty of uncertainty over how much operating room Mattrick will actually have. 

Now what: I'd expect the stock to keep rallying in the short run. "I joined Zynga because I believe that Mark's pioneering vision and mission to connect the world through games is just getting started," said Mattrick in a statement. "Zynga is a great business that has yet to realize its full potential." Of course, when you consider the worrisome trends -- rapidly declining users and increasing competition -- that Mattrick now faces, I'd be cautious about buying into that long-term bullishness.   

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