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   Technology StocksZynga, Inc.

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To: The Ox who wrote (309)3/26/2014 11:45:30 AM
From: Glenn Petersen
   of 364
Are you suggesting that analysts and commenters can be bought? How shocking. :)

And here I thought that pay-for-play was limited to Illinois politics.

The KING offering was getting trashed from the moment they filed their registration statement. It is hard to fault management for monetizing value for their shareholders, even if it may be transitory, and raising a pile of cash. I honestly don't know how to value the company. It didn't help that some of its existing shareholders sold stock in the offering.

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To: Glenn Petersen who wrote (310)3/26/2014 11:53:44 AM
From: The Ox
   of 364
pay-for-play was limited to Illinois politics.

No way! We may corner the markets in this area and often those responsible are idiots who get caught red handed but I suspect that "pay-for-play" goes back almost as far as mankind itself.

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To: The Ox who wrote (311)3/26/2014 12:18:35 PM
From: Glenn Petersen
1 Recommendation   of 364
My comment was made in jest and out of a sense of civic pride (or shame).

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To: Glenn Petersen who wrote (308)3/26/2014 3:35:00 PM
From: The Ox
   of 364
Just too a look and it appears KING has 3 times the cash flow per share of EA.

At least from that metric, they are either way under priced or EA is way over priced.....

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To: The Ox who wrote (313)4/6/2014 11:11:22 AM
From: Glenn Petersen
   of 364
The problem for KING is that many people don't believe they can follow up on their initial success. EA has franchises.

Another problem for both KING and ZNGA is that they have to compete with the indie app developers:

The Guilt of the Video-Game Millionaires

Posted by Simon Parkin
The New Yorker
April 3, 2014

One night in March, 2013, Rami Ismail and his business partner Jan Willem released a game for mobile phones called Ridiculous Fishing. Ismail, who was twenty-four at the time and who lives in the Netherlands, woke the following morning to find that the game had made him tens of thousands of dollars overnight. His first reaction was not elation but guilt. His mother, who has a job in local government, had already left for work. “Ever since I was a kid I’ve watched my mom wake up at six in the morning, work all day, come home, make my brother and me dinner—maybe shout at me for too much ‘computering,’?” he said. “My first thought that day was that while I was asleep I’d made more money than she had all year. And I’d done it with a mobile-phone game about shooting fish with a machine gun.”

Ridiculous Fishing made a hundred thousand dollars in its first month on Apple’s App Store. It won the Design Award at the 2013 Apple Worldwide Developers Conference and continued to sell well, passing a million dollars in sales within six months of its release. Ismail and Willem had begun making games together while in college, and to create Ridiculous Fishing they had worked in borrowed office space and subsisted on a diet of instant ramen. “Somewhere in the back of your head you know that you worked hard, that you sacrificed your stability and you took on the risk of financial ruin for a long while,” Ismail told me. “You did things that other people were not willing or capable of. And that paid off. But, even so, it feels awful. I couldn’t get rid of the image of my mother in her car, driving to work.”

Ismail is not the only game maker who, in recent years, has struggled to adjust to unexpected financial success. Today, makers of independent games can earn a windfall far more swiftly than their counterparts in film or music. A game developer is able to work alone, on a laptop in a public library or in a one-bedroom apartment. Then, when a game is finished, online stores such as the App Store or the digital PC-game store Steam make the work available to a global audience in an instant. Seventy per cent of every sale on Steam and the App Store goes directly to the developer. The stores release the income to developers at the end of the month.

Most games, however, do not make a great deal of money. Each month, thousands of new games are made available on Steam and in the App Store, and, although Apple boasted in 2012 that it had paid out a billion dollars to app and game developers the previous year, Forbes estimates that the average game earns just four thousand dollars. Nevertheless, if your game becomes a hit, you can become a millionaire within weeks.

Stories of sudden indie-game riches are appealing. They have a fairy-tale quality, the moral of which is often, “Work hard and you will prevail” (even though this kind of overnight success is often the result of an un-replicable recipe involving privilege, education, talent, toil, and timing). In the field of video games, which many people view as childish and pointless, these stories also have a legitimizing effect: they measure the medium’s worth in dollars, when its artistic and moral worth is more questionable. P rofiles of prominent indie game makers often lead with details of their financial success.

But for many of these young game-maker millionaires, who created their work out of a passion for play rather than prospecting, the wealth and attention can be jarring. In February, Dong Nguyen, the creator of Flappy Bird, a recent iOS game that had inexplicably risen to the top of the App Store charts, stopped selling his game even though it earned him an estimated fifty thousand dollars a day. “I am sorry ‘Flappy Bird’ users,” he tweeted at the time. “22 hours from now, I will take ‘Flappy Bird’ down. I cannot take this anymore.” He added that the game had “ruined” his “simple life.” (He said in an interview with Rolling Stone that the invasion of his privacy by press and paparazzi, who had camped outside his home in Vietnam, had been a major factor in his decision.)

Ismail said what happened to him was like winning the lottery, with all of the complicated emotions that come with it. He has since sought out other developers whom he perceived to be on the cusp of a similar windfall, to talk them through the emotional landscape they might find themselves in and some practical considerations. “I advise them to find one thing to buy with the money,” he said. Buying something tangible makes it more real. It’s a healthy thing to do.”

In October, 2013, Ismail travelled to Austin, Texas, to visit Davey Wreden, the twenty-four-year-old creator of a game called The Stanley Parable. Ismail had a hunch the game would be a commercial success. “I offered Davey my advice, and he went out to the store,” Ismail said. Two hours later, Wreden returned home having decided how, if his game sold well, he would spend the money. “He said that he would go to the store and buy the cheapest and most expensive salmon,” Ismail recalled. Wreden would then cook the two fish side by side and conduct a taste test to see whether the cost difference was justified.

Wreden’s game has sold six hundred thousand copies, generating an estimated 6.3 million dollars for him and the game’s artist, a British teen-ager named William Pugh. Following the success, Wreden bought a Ping-Pong table. He said that he planned to try the salmon experiment, too. Ismail’s indulgence had been to buy each of the video-game consoles he had previously been unable to afford. Markus Persson, who earned more than a hundred million dollars in 2012 from his game Minecraft, told me in 2013 that he also initially felt guilty about his newfound wealth and mostly limited his luxury to the latest computer. (He has now acclimatized somewhat, he says, and travels by private jet and hosts lavish parties for friends and fans.)

Despite Ismail’s warnings, Wreden still felt isolated and confused after his success. In February he wrote a frank blog post about the “depression” he has felt. He described an imagined conversation with someone chastising him for complaining. “Oh, yeah, we get it, real rough life you’ve got there,” he wrote. “Sounds pretty miserable to be loved for your art. Maybe go cry about it into a pile of money?”

For game designers, the pressure to replicate a former success can be far more paralyzing than simply deciding how to spend the money. Persson recently cancelled 0x10c, the game he left Minecraft to develop, citing a “ creative block.” For Wreden, a major part of the problem is the scope that the money gives him to increase the ambition of his next project—like a filmmaker who moves from recording with a camcorder to managing a full-scale Hollywood-style production. “I like limitations,” Wreden told me. “It’s intimidating to think that we have enough time and resources to do whatever we want.”

Some have chosen to put all of the money earned by their first success into a subsequent project. Jonathan Blow, the creator of Braid, a 2008 Microsoft-published game that was, arguably, the first mainstream indie success, also became a millionaire through his game. Blow’s single extravagance was the purchase of a crimson Tesla Roadster for a hundred and fifty thousand dollars. He funnelled the remainder of the money he earned—which he estimates to be around four million dollars—into his next game, The Witness, due for release later this year. Blow’s production comes with increased risk: it will need to sell many more copies than Braid to make back its costs. Blow says he doesn’t feel any pressure to turn a profit. “I am just pursuing the ideas that I myself find most interesting,” he told me. “I am not trying to make the most mass-market thing.”

In 2010, after eighteen months of development, Edmund McMillen released Super Meat Boy, a fifteen-dollar game that has since sold more than two million copies. McMillen’s story was featured in the documentary “Indie Game: The Movie,” which he believes helped propagate the idea that independent-game development is an easy route to wealth.

McMillen receives e-mails from people who have quit their jobs to follow his example. “I’m glad the film inspired people, but I don’t like the feeling that I’ve perpetuated a myth that people can get rich making games,” McMillen, who spent close to a decade working on games from his single-room apartment, said. “The money has made relationships complicated,” he said; distant family members and old acquaintances from school have approached him to ask for financial help. “I’m just a guy who makes games. I’m an artist who likes to be alone. This success has artificially elevated me; it’s caused jealousy, even hatred.” For this reason, McMillen stays away from industry events and other places where he might be recognized. He maintains that he has made money in order to continue to make games, and not the other way around. “If my games hadn’t sold, I would be in my crappy one-bedroom apartment making more games,” he said. “Maybe I’d be even happier than I am today.”

Above: Jan Willem and Rami Ismail, the game makers behind Ridiculous Fishing. Photograph by Jim Wilson/The New York Times/Redux.

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To: Glenn Petersen who wrote (314)4/7/2014 10:24:27 AM
From: The Ox
   of 364
I understand the worries. Don't get me wrong. At the same time, the cash flow KING is generating should allow them time to either build a few new revenue streams or buy them if their production falls short. They came to market at a great time for the company but not for the stock, IMO. It will be interesting to see if they can produce more in the near future or if they see their revenue drop significantly over the next couple of quarters. The cash they built from the IPO will help big time.

Many IPOs can't perform to the standards of the market's expectations. Whether it's a few years or a few quarters is a big question for many newly minted issues. We saw this with ZNGA.

GRPN, to me, is another excellent example. Maybe I'm wrong but I think they're a few quarters away from starting to live up to those expectations. It may be a bit longer than that but I think they've done many of the "right things" to build their franchise. This has not directly translated into earnings power yet and they've been trading long enough for those who "bought the initial hype" to be frustrated.

We'll crystal ball has been wrong many, many times!!

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To: The Ox who wrote (315)4/7/2014 11:25:54 AM
From: The Ox
   of 364
Wedbush analyst Michael Pachter reiterated an Outperform rating and $7 price target on Zynga (NASDAQ: ZNGA) and added the stock to its 'Best Ideas List' saying they expect Zynga to meet or exceed Q1 guidance and reiterate full-year guidance when it reports results on Wednesday, April 23.

Pachter said, "Our Q1 estimates are for bookings of $150 million and EPS of $0.00, vs. consensus of $148 million and $(0.01), and guidance of $138-148 million and $(0.01). We believe management has undertaken an “under-promise and over-deliver” approach to guidance, strengthening our belief that it will avoid a miss. Our FY estimates are for bookings of $820 million and EPS of $0.04, vs. consensus of $788 million and $0.01, and guidance of $760-810 million and $0.01-0.03."

The analyst notes Zynga appears determined to address the “play anywhere” free-to-play market by leading with mobile games and ensuring that its games are available cross-platform. He also said Zynga management is focused on the top 20 mobile markets, and intends to focus its new games on the highest revenue genres in those markets.

They also expect Zynga to profitably grow its business and think that Zynga’s current staffing levels imply that a significant number of new products are on the horizon.

For an analyst ratings summary and ratings history on Zynga click here. For more ratings news on Zynga click here.

Shares of Zynga closed at $4.20 yesterday.

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From: JakeStraw4/8/2014 4:22:34 PM
   of 364
Why Zynga looks well positioned

Early in February, Zynga's stock price surged after a UBS analyst increased his rating on the stock, following the company's decision to purchase NaturalMotion.

Moreover, after CEO Don Mattrick announced the launch of pilot programs for Zynga's real-money poker game across various parts of the world by the end of this year, shares received another boost. As Zynga makes investments to grow and sustain its franchises, the stock should see solid growth in the future.

Driven by the company's strategic investments, Words With Friends and its Casino franchise are yielding impressive results. For example, in the previous quarter, bookings for Words With Friends grew 33% sequentially, which was the biggest in the game's five-year history. On the other hand, the Casino franchise achieved sequential booking growth for the first time in the last 18 months, indicating the fact that Zynga is indeed making the right moves.

Zynga has also introduced a new mobile slots game, and the company will continue to push more games on the mobile platform. Management expects 2014 to be a landmark year for its mobile growth, with new additions such as FarmVille, which it plans to introduce in the second quarter. With a rich history of more than 400 million people having played FarmVille on Facebook, Zynga is eager to take this success onto the mobile platform.

Zynga is also very confident about the racing game genre on mobiles. NaturalMotion has pioneered the racing experience on mobile devices with games such as CSR Racing and Clumsy Ninja.

CSR is among the top racing games on mobile in more than 20 countries. On the other hand, Clumsy Ninja achieved 10 million downloads in the first week of its launch and became the number one free game in the Apple App store.

Hence, the acquisition of NaturalMotion will help Zynga accelerate its growth in mobile gaming. Acquiring NaturalMotion will benefit Zynga in three ways. First, it will help it expand its creative pipeline; second, it will boost its growth in mobile, and third, it will bring next-generation technology and tools to Zynga.

Consequently, around 75% of all the games under development at Zynga can also be played on mobile. It anticipates its mobile bookings to surpass its web bookings going forward, and account for more than 50% of its bookings base.

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To: The Ox who wrote (315)4/23/2014 4:26:49 PM
From: Glenn Petersen
1 Recommendation   of 364
I am not inclined to criticize a company for taking advantage of an open window to tap the public markets, even of it means a few bumpy quarters while they get their act in order. If they don't take advantage of the opportunity, they may never get another chance. GRPN timed their IPO perfectly. They needed the cash and the window was open. The cash has given them an opportunity to revamp their business model. Livingsocial was not so lucky. The KING IPO was not a disaster. They raised their cash at a reasonable valuation and now have an opportunity to show the world that they have a Second Act, or not.

IPO window slamming shut on tech and biotech

By Aaron Pressman
The Exchange
April 12, 2014

So much for the busiest week for IPOs since 2007 … because it looks like Thursday’s market swoon has derailed much of the new issues market.

Seven companies were scheduled to go public after the close yesterday but it looks like only three actually made it: Mediterranean restaurant chain Zoe’s Kitchen ( ZOES), energy infrastructure operator Enable Midstream Partners ( ENBL) and livestock drug maker Phibro Animal Health ( PAHC).

That’s not surprising after the tech-heavy Nasdaq Composite Index plunged 3%, its worst single day decline since November 30, 2011. Recent IPOs and other fast-growing, unprofitable companies were among the hardest hit. Network security specialist FireEye ( FEYE) dropped 12%, streaming music service Pandora ( P) fell 10% and cloud HR provider Workday ( WDAY) lost 9%.

So as for the tech and biotech IPO candidates planning to price last night? Crickets. There is no pricing information for HR cloud services provider Paycom Software, early-stage biotechs Scynexis and Aldeyra Therapeutics or real estate investment trust City Office REIT. The web site IPO Boutique reported Scynexis and City Office would try to price next week.

Underwriters did complete one deal postponed from Wednesday, Farmland Partners ( FPI), but at a reduced size and at the low end of its expected price range.

And none of the four deals priced Thursday night were well-known companies. The real IPO test comes next week, when Weibo — the Twitter of China — and Sabre, owner of the Travelocity website, are planning to raise big bucks.

If the market continues to drop, especially for technology and Internet companies, there’s little chance those deals will price. But if things recover quickly, the IPO window could open right back up.

We’ll update you as more information becomes available.

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To: Glenn Petersen who wrote (318)4/23/2014 4:31:41 PM
From: Glenn Petersen
1 Recommendation   of 364
The press release:

Zynga Misses in First Quarter, But Touts New Leadership and Mobile Growth

By Eric Johnson
April 23, 2014, 1:09 PM PDT

Still in the middle of its social to mobile transition, Zynga fell short of the street consensus on earnings per share in Q1, with a loss of seven cents vs. an expected one-cent loss, dragged down by higher than expected restructuring costs.

Analysts initially expected the restructuring costs to hit in the second quarter, but the company pulled them forward, totaling $29 million in the first quarter of 2014. However, the company reported better-than-expected bookings of $161 million, beating analyst expectations of $146.5 million. Total revenue fell 36 percent year-over-year to $168 million.

Zynga shares are trading up 4 percent after hours, at 4.61 per share as of the time of this writing.

The gaming company also announced the completion of a leadership shuffle that began with the appointment of former Xbox executive Don Mattrick as CEO last year. Former CEO Mark Pincus, who had been serving as Chief Product Officer under Mattrick, has stepped down from that role but will remain chairman of Zynga’s board.

Alex Garden, currently the general manager of Xbox Music, Video and Reading at Microsoft, will become the first President of Zynga Studios, a new role reporting to Mattrick, on May 5. Garden will oversee all games developed at Zynga except NaturalMotion’s titles, which will remain under that company’s CEO Torsten Reil.

Reporting to Garden will be another new hire, Chief Visual Officer Henry LaBounta, who started two weeks ago. LaBounta previously worked with Mattrick on the Need for Speed franchise at EA, and has experience in CGI, movies and television by way of a six-year stint at DreamWorks.

In its last new hire, Jennifer Nuckles, Zynga is also getting a Chief Marketing Officer for the first time since the resignation of former CMO Jeff Karp in 2012. Nuckles started last week and will oversee attempts to go beyond Zynga’s current marketing initiatives, banner and interstitial app ads.

Following January’s acquisition of Natural Motion for $527 million, the company’s monthly mobile audience grew 45 percent, but even excluding Natural Motion’s hit games like CSR Racing and Clumsy Ninja, mobile users were up 11 percent quarter over quarter. At GDC last month, Mattrick said the company’s mobile turnaround is halfway there, and it’s likely that transition will be the central focus of the company’s call with investors at 2:00 Pacific Time.

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