Why Zynga Stock Jumped 8% Today

The Market sees a mouse, and jumps -- for joy.

Rich Smith
Rich Smith
Aug 22, 2018 at 6:04PM
Technology and Telecom

What happened

Shares of mobile games-maker Zynga Inc. (NASDAQ:ZNGA) climbed more than 10% in intra-day trading Wednesday before settling down to close the day still up a respectable 7.8%.

You can thank Disney for that.

A man wearing headphones cheers as he looks at his laptop.

Zynga is cozying up to the House of Mouse, and investors like that a lot. Image source: Getty Images.

So what

In a press release  posted on its website, Zynga announced after the close of trading Tuesday that it has just signed a "multi-year licensing agreement with Disney to develop and publish a new mobile game, with the option for a second game," based on Disney's Star Wars franchise. Zynga will also take over "operation" of Disney's Star Wars: Commander "free-to-play real-time strategy game" that was first launched back in 2014.


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Now what

No financial terms were mentioned in the press release, so it's hard to say how much this deal means for Zynga in terms of dollars and cents -- revenue and profits.

Investors appeared willing to bet Wednesday, however, that it's going to be worth quite a lot to Zynga. In bidding up the shares today, they added $250 million to Zynga's market cap, lifting the stock's valuation close to triple digits.

As of its closing trade, Zynga stock now sells for 98.3 times trailing earnings.