Zynga Stock 2013 Timeline – ZNGA Gets Back In the Game

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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-stock-zngaZynga, 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:

zynga-stock-chart-znga1. 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%.

zynga-stock-chart-znga5. April 3: Zynga shares popped after the company debuted two online gambling sites — sites that use real, not virtual, money. Zynga lauched ZyngaPlusPoker and ZyngaPlusCasino in the U.K., where players can stock their accounts with pounds, dollars, euros, yen and Canadian dollars. The market loved the news, despite there already being heavy competition in the U.K. online gambling business. In another shot in the arm, Zynga notches a win in the Apple (AAPL) App Store when its free game, What’s The Phrase, cracks the top 10.

Aftermath: Zynga stock rallies 15% during the session to close at $3.53. Investors don’t know it at the time, but Zynga is about to begin a period of sustained underperformance.

6. June 3: Zynga zapped any good feelings or hope surrounding its comeback after it slashed 520 positions, or 18% of its global workforce, because of lousy operating performance. Traders couldn’t give Zynga stock any love for this cost-cutting move — not when it smacked of such desperation. ZNGA was forced to lay off employs because of weak operations. Indeed, business was so bad, Zynga took a hatchet to its second-quarter guidance for bookings and net loss.
Aftermath: Zynga stock drops 12% on the bad news. The hangover weights on ZNGA until it bottoms out on June 24 and finally reverses trend.

7. July 1: Relief set in — and the long slide in Zynga stock is arrested — after reports surfaced that founder and CEO Mark Pincus would step down so that ZNGA could bring in a new leader. Indeed, Zynga hired Don Mattrick — then president of Microsoft’s (MSFT) Xbox business — to be CEO and make the Zynga comeback story a turnaround story.
Aftermath: Zynga stock rises 28% over the first half of the month.

8. July 26: The honeymoon with Zynga stock stemming from the new CEO came to an abrupt end with the quarterly earnings report. ZNGA actually beat Street estimates and narrowed its net loss. But the company also delivered a double-whammy of bad news. Once again, Zynga slashed its outlook. Even worse from the Street’s point of view was that Zynga abandoned its plans to enter the online-gambling industry in the U.S.
Aftermath:
Zynga stock tumbled 14% to close at $3.01 — its biggest one-day slide in a year.

9. Aug. 14: Zynga CEO Don Mattick began a sweeping overhaul of the executive team, designed to reduce layers of hierarchy and improve efficiency. Among those shown the C-level-suite door are the COO, the CTO and the Chief People Officer. In addition to previously announced restructuring plans and cost cuts, the new organizational structure pleases the market.
Aftermath: Despite falling on the news and trending down in the days after the purge, ZNGA stock finally stabilizes in late August and trends upward from there on.

10. Oct. 24: Despite flocks of users leaving its games, Zynga released better-than-expected quarterly earnings. ZNGA posted Street-beating revenue levels and a narrower-than-expected loss, although bookings continued to decline. In other welcome news, Zynga hired Clive Downie, an executive with considerable experience in mobile, to be chief operating officer of mobile game distribution. The surprise upside and move to shore up mobile left Zynga traders and shareholders feeling brighter about the future.
Aftermath: Zynga stock pops more than 5% in the session following the the third-quarter earnings release.

11. Nov. 25: Shares in Zynga topped out for the year in wake of sales figures from the competition — Sony’s (SNE) PlayStation 4 and Microsoft’s Xbox One. Both gaming consoles reportedly sold more than a million units each within the first 24 hours of becoming available. Around the same time, retailer GameStop (GME) said it had 2.3 million customers waiting to purchase the new consoles from Sony and Microsoft.
Aftermath: Zynga stock loses nearly 10% since its November high, but is still up more than 74% year-to-date.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2013/12/zynga-stock-znga/.

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