Zynga (ZNGA) is up more than 74% year-to-date, but ZNGA stock has taken traders and investors on one hell of a ride.
Zynga, the online social game maker, has seen its share of drama in 2013 after peaking and cratering last year. In early 2012, Zynga stock was closing in on $15. By the end of the year, ZNGA stock was struggling to break above $2.50.
That set this year up as a comeback story for Zynga stock — and it didn’t disappoint, despite all the volatility.
There were better-than-expected earnings and some bitter quarterly disappoints; hot acquisition rumors; exciting new product launches; a new CEO. Amid it all there was no shortage of market-moving news on Zynga stock. And since it traded below $5 a share for the entire year, ZNGA swung around almost like a penny stock at times.
However, as much as ZNGA stock has bounced around in 2013, it’s important to note that it never once went negative. That says something good about Wall Street’s verdict on the state of its turnaround.
It’s also worth noting that Zynga is beating the broader market by nearly 50 percentage points for the year-to-date. Whatever the future holds, Zynga stock has been a big winner in 2013.
Some of its largest one-day moves and most important announcements from the last year are marked on the Zynga stock chart below. Take a quick look at how ZNGA got here:
1. Feb. 5: ZNGA makes its first big move of the year, after better-than-expected fourth-quarter earnings spark a sustained rally in Zynga stock. On an adjusted basis, Zynga posted a surprise profit of a penny a share; Wall Street was looking for a loss of 3 cents. Revenue and bookings exceeded expectations, too, largely thanks to the launch of FarmVille 2. In even better news, ZNGA said it was making progress in mobile, and lifted its revenue outlook.
Aftermath: Zynga stock jumps more than 7% during the regular session and the rally extends for a week to carry ZNGA above $3 for the first time since late September.
2. Feb. 22: After peaking out at $3.67, the good earnings news wore off and Zynga stock was in need of another catalyst to arrest the profit taking. And, boy, did Zynga get it: News that Nevada became the first state to approve online gambling. Since one of Zynga’s most popular games is Texas Hold ‘Em Poker, traders piled into Zynga stock. And if that weren’t enough good news, three days later Zynga delivered another catalyst for its rally by closing more offices and shedding workers. Those costs cuts helped ZNGA stock go into another period of sustained upside.
Aftermath: After bottoming at $2.96 a share when the post-earnings glow finally faded, Zynga stock rides both pieces of good news to regain almost everything it lost in the sell-off. ZNGA shares are now up more than 50% for the year-to-date.
3. March 11: In the ultimate catalyst for just about any stock, Zynga stock became all the rage on the Street when acquisition rumors surface. An analyst report from Wundelich Securities said that Yahoo (YHOO) might consider a buyout of Zynga. With Yahoo on a buying binge, the news certainly seemed plausible. The rub at the time was that Yahoo was looking for deals under $1 billion — and Zynga stock had a total market value of $3 billion.
Aftermath: Zynga stock jumps more than 10% during the session to close at $3.93 a share. It’s the highest closing price for ZNGA stock since July 2012.
4. March 20: Having moved past the unfounded acquisition rumors, Zynga stock was cooling off, anyway, but then an analyst downgrade touched off what in hindsight would prove to be the beginning of a sustained sell-off. Bank of America/Merrill Lynch cut Zynga to neutral, largely on valuation. Zynga stock was up 47% for the year-to-date at that point.
Aftermath: Zynga stock falls 3.7% the day of the downgrade. By the beginning of April, Zynga stock pares its year-to-date gain to about 30%.