Zynga Fallout And Rumors Of A Takeover By Facebook

Who’s blowing smoke? Who’s playing a better game Zynga or Facebook?

As you can deduce from the 2 charts above the shareholders of ZNGA nor FB are currently not faring well in their investments. In fact, both companies stock quotes are currently flirting with all-time lows.

Between late January and mid April ZNGA did have quotes that were above Zynga’s initial IPO.

On the other hand FB (Facebook) has never sold for more than it’s IPO.

Yes, we poked some fun at the Zynga stocks back upon the release of Zynga’s IPO. On Monday, December 14, 2011 we made a post that we called; Zynga Has Seen Sunnier Days Before ZNGA. We even called ZNGA a penny stock within that post. We knew that ZNGA would struggle and even started a satirical Zynga charity. After all, Zynga is a tech company which only sells virtual goods. It shouldn’t have taken a brain surgeon to figure this one out.

Upon the announcement of Facebook filing for it’s IPO investors gambled on ZNGA (ZNGA Rocks On The Stocks) around February 3rd, 2011 and ZNGA share quotes rose in anticipation of the FB IPO. Many investors thought the 2 companies would work hand in hand and help each other since Facebook claims to make about 12% of it’s revenue from Zynga. That didn’t happen.

We now have many law firms investigating Zynga (Zyngas Shareholders Thrill Ride). We also have more rumors and speculations like a Facebook takeover of Zynga. Here are some quotes from seekingalpha.com;

Facebook Torpedoes Zynga: Takeover Possible?

Mike Stallings

“Let's be frank, Facebook needs something to reaffirm the public perception about the company. As bad as Zynga has been sinking, Facebook is not far behind.” “Whether or not Facebook deliberately drilled a torpedo into Zynga's future is of course up for debate, and something we will probably never know” “the fact remains that now rather than later Facebook should take a serious look at acquiring its partner and then adapt their pages to be Zynga-friendly” “Once in control of the company, they could then decide to vault all of the Zynga products to the front of the line. Forget the old theory, they could decide internally that the old way was suddenly the best for them. They would happily admit their mistake, and then business as usual.”

The only thing that is certain right now is that Zynga needs to make some money and tons of it.

Therefore, I’d expect to see more and more events and sales features that players may need to purchase RP’s in order to complete. The adverse affect will be even more players leaving Zynga’s games. Which, ultimately, will only worsen the problem.