Unusual Options Activity In Zynga
Zynga Inc. develops, markets, and operates games primarily for the mobile devices such as Apple iOS and Google's Android operating systems, as well as on social networking sites, such as Facebook.
Zynga now gets over 90% of their revenue through mobile game play with hits like Empires & Puzzles & CSR2 and Merge Dragons. However, what put Zynga on the map was their initial game FarmVille.
Activision Blizzard (ATVI), publisher of games like “Call of Duty” and “Overwatch,” reported its Q1 2020 earnings on Tuesday, with net bookings jumping 21% year-over-year, as the company saw a significant spike in demand amid lockdown orders during the coronavirus pandemic.
Zynga also reported earnings several weeks ago as well, but results were mixed despite lockdown mandates in place due to COVID-19.
Besides the bottom-line miss, user numbers for the quarter were somewhat disappointing. Daily active users (DAUs) fell roughly 7% year over year to 21 million, and monthly active users (MAUs) dipped 5% to 68 million. The addition of Merge Magic! and Game of Thrones Slots Casino as active titles wasn't enough to offset declines for Words With Friends and other social games.
The declines came even as Zynga started to see increased engagement in conjunction with conditions created by the coronavirus in March. However, Gibeau noted that the engagement uptick spurred by the shelter-in-place conditions only started to kick in at the tail end of the quarter, and he indicated that heightened engagement for its portfolio was much more notable in April.
Zynga's most recent guidance suggests that the business will continue to post impressive sales-and-bookings momentum in the next quarter and for the full year.
According Golden Casino News, mobile gaming accounted for 60% of revenues in the global video game market in 2019.
And the global mobile games market is expected to reach a valuation of $56.6 billion by 2024. It's no wonder Zynga is backed by so many institutions with 78% of the stock currently owned by institutional investors and hedge funds.
Goldman Sachs Group Inc. raised its stake in shares of Zynga by 35.1% in the 4th quarter. Goldman Sachs Group Inc. now owns 25,999,536 shares of the company’s stock valued at $159,117,000.
Swiss National Bank boosted its stake in shares of Zynga Inc by 1.8% during the first quarter. The bank owned 1,651,053 shares of the company’s stock after purchasing an additional 28,800 shares during the period.
Peregrine Capital Management LLC purchased a new position in shares of Zynga in the 1st quarter valued at $18,737,000.
What’s also interesting is Zynga partnered with Amazon to give Prime members an extra perk. Bernard Kim, Zynga's president of publishing, stated the partnership with Amazon is just starting and that there was a lot more to come in the future.
On Friday, the Smart Money went H.A.M. on Zynga buying over 20,000 and 60,000 call options at the $8 and $9 strike price expiring in July.
On Friday, price rose 13% and is now trading above $9. Is there more room to the stock to go higher? Honestly, I don't know as earnings came and went. Is there some type of announcement in the coming days / weeks? Honestly, I don't know. However, the charts suggests price can move higher to the $11 level, which is right before the weekly supply zone.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted Using LeoFinance
