Zynga News: Why ZNGA Stock Is Getting Zapped 3% Today

Zynga (NASDAQ:ZNGA) news concerning a new Apple (NASDAQ:AAPL) ad policy is hitting ZNGA stock on Tuesday.

A Zynga (ZNGA) sign hangs above the company headquarters in San Francisco, California.
Source: Sundry Photography / Shutterstock.com

The new policy will make it so that Apple users will have to opt-in for ad tracking. That’s the complete opposite of how it works now, which requires users to opt-out of the ad tracking service. It goes into effect next month

So what exactly does this mean for Zynga? The company makes use of ad data through its apps. Doing so allows it to tracks users and more easily share the interest of its players with companies that buy ad information. With this new policy in place, Zynga will no doubt lose out on some of that data.

Berenberg analyst David Beckel thinks this Apple ad policy change is bad news for Zynga. The analyst expects that the ad switch will result in the company losing a tenth of its revenue, reports Barron’s.

To go along with that sour take, Beckel also dropped ZNGA stock from its previous “buy” rating to a new “Hold” rating. Adding to that is a new price target of $10.50, as compared to the previous $11 price target. However, that’s still a 10.9% upside from the stock’s closing price of $9.47 on Monday.

Investors in ZNGA will have to wait a decent time before they see how much the new Apple ad policy hurts Zynga revenue. The company just reported earnings for the second quarter of 2020 last week. It missed estimates but the stock was up as it announced plans to acquire Istanbul-based mobile gaming company Rollic.

ZNGA stock was down 3.5% as of Tuesday afternoon.

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

Article printed from InvestorPlace Media, https://investorplace.com/2020/08/zynga-news-has-znga-stock-dipping-lower/.

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