Zynga Inc (NASDAQ:ZNGA) Reflects Worsening Market with Lower 2012 Outlook
Social gaming lost its luster in just a year, from being the next hot consumer Internet offering to bringing questionable revenues for Zynga Inc ( NASDAQ:ZNGA ). The company once again slashed the 2012 earnings outlook on poor performance and suffered a record low on the stock market. Zynga still cannot stopper the outflow of users from its leading games, CityVille and FarmVille, once major sources of revenue. The company faces cash problems as well, as many analysts believe its IPO in December was meant to secure operating cash, rather than expose investors to the opportunities of a revolutionary business model. [BANNER] Zynga cut its third-quarter earnings outlook to a loss after absorbing a loss from a recent acquisition. The bottom line will be hit by a write-off of 85 to 95 million dollars for the purchase of OMGPOP, the New York game studio. OMGPOP was the author of game Draw Something, but it failed to replicate its initial hit and justify the purchase price of $182 million. On top of that, experts are predicting cash shortages may mean layoffs for Zynga's team of more than 3000 people. The year may end with a further decline in operating income. Facebook Inc ( NASDAQ:FB ) may also suffer, as it takes about 10% of its revenue from Zynga fees. Shares of Zynga trade 75 percent below their IPO value and yesterday lost 22 cents to $2.19. Bank of America Merryll Lynch (NYSE:BOFA) lumps Zynga with another stock quickly losing steam: Groupon Inc. ( NASDAQ:GRPN ). The analysts are positive on the large-cap companies in the sector, raising its outlook for Linkedin Corporation ( NASDAQ:LNKD ), eHealth Inc. ( NASDAQ:EHTH ) and Expedia Inc. ( NASDAQ:EXPE ).                                                                                                           Advertisement   IMPORTANT ZNGA UPDATE : October 5th 2012 - ZNGA is making a chart pattern that has been seen 1243 times since the year 2000.  52.13% of the stocks that have made this pattern went down over 16% in a 20 day period.  Watch the video to learn more about the probabilities of ZNGA stock moving up or down.                                                                                                   >>Click here to watch the video and learn more
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