Soros Fund, the diversified asset manager and financial-services company headed by well-known value investor George Soros, is not the type to throw money at one-hit wonder game companies. You wouldn't necessarily think that the fund would buy two million shares in Zynga (ZNGA), worth $7.6 million.

Yet according to Soros Fund's recent 13-F filing, in which it is required to report its investment holdings, the company has done just that.

Not everyone is enthusiastic
Zynga provides social game services. It was founded in just 2007, and it is headquartered in San Francisco.

When you buy Zynga, you're not investing in a company that produces tangible goods that people must buy no matter what. If you want customer loyalty, stick to makers of breakfast cereal. Online gaming fans are notoriously fickle, drifting from game to game. Yesterday, Farmville was the rage. Tomorrow, who knows?

Another criticism of Zynga has been its delay in moving to mobile phone platforms with the claim that it has focused for too long on desktop applications, mainly through Facebook.

Zynga's detractors also point out that its cash flow has decreased to $7.7 million -- down from $20.9 million in the same quarter last year. Falling revenue isn't winning fans, either. Fourth-quarter 2013 revenue fell by 43.3% from the year-ago quarter.

Besides, we're talking about a company that was sued by its own shareholders over its December 2011 IPO, after the price fell sharply. Shareholders accused management of misleading them about how well the company was expected to perform.

So why would anyone buy Zynga?
Zynga is still on Facebook, but it's also getting with the program and expanding into stand-alone social games for mobile phone platforms such as Apple iOS and Android. In addition, the company offers games on the Internet through its website,

Zynga could well pull off this transition. These positive numbers are on its side:

  • Despite a negative net profit margin, Zynga's gross profit margin is still high at 84.84%.

  • Zynga has been drastically cutting expenses. Operating expenses are down 26% since the year-ago quarter.

  • Zynga has practically no debt. The company will have no trouble meeting short-term cash needs.

Recent developments are even more positive
In the time since Soros Fund purchased shares in Zynga, more good news has emerged. Zynga had been dogged by that fraud lawsuit linked to its IPO. On February 25, 2014, U.S. District Judge Jeffrey White dismissed the complaint.

Since the end of 2013, Zynga has also announced that it will buy NaturalMotion, a U.K.-based mobile game and technology company, for $527 million in both cash and stock. NaturalMotion's hit, CSR Racing, is said to be grossing over $12 million per month.

While an investment of .06% of the Soros Fund portfolio is modest compared to some of the fund's other purchases, it's still a vote of confidence in the maker of Farmville, Zynga Poker, Words With Friends, and Mafia Wars. If the Soros Fund is buying shares in a company that sells cutesy virtual cows and tokens that help you win word games against your friends, you might want to give it a second glance, too.