What happened

Shares of Zynga (NASDAQ:ZNGA) bounced 19.6% higher in December, according to data provided by S&P Global Market Intelligence. The move capped off a year that saw its stock rise over 50% as mobile gaming's popularity surged through the COVID-19 pandemic and lockdown orders.

So what

Zynga became the biggest mobile gaming company in the U.S. in August, dethroning Activision Blizzard after it acquired another mobile gaming specialist, Peak, for $1.8 billion. It followed that up with the takeover of Rollic in October. 

Man playing game on phone

Image source: Getty Images.

Mobile game downloads have also accelerated as the year progressed. Zynga was able to post record revenue in 2020 -- even in the third quarter, despite its earnings report disappointing the market.

Still, some on Wall Street remained bullish on the stock, with Wells Fargo analyst Brian Fitzgerald upgrading it to overweight from equal weight in the middle of December because he didn't think the market was appreciating Zynga's potential.

ZNGA Chart

ZNGA data by YCharts.

Now what

Zynga has a portfolio of franchises that will be supported by its vertically integrated advertising network. CEO Frank Gibeau has outlined a revitalization strategy that includes broadening the company's business beyond the narrow confines of its mobile platform, such as moving to live game services and events.

Its acquisitions also give Zynga access to an international gaming market it didn't previously have, and the new live business could further expand the social gaming aspects of titles like Zynga Poker.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.