So much hype with the ZYNGA IPO (ZNGA) in the recent months, you would think that this company would stand on it’s own two legs at the open of today’s market. Wall street Traders punished the stock down 10%.
The the reason for this drop is a matter of speculation. The current fundamental situation of the company is unclear. Of course valuation is based on “perceived” future earnings of the company and for some reason, the street just doesn’t understand it.
I’ve used Zynga’s products. Great stuff. If they continue to produce great software and games, financial statements should be robust. Despite the dump in today’s action, Zynga did raise some good money for future products. Let’s hope those young kids put the money in development of new products. I have faith they will. Too many tech compaines view the IPO as a end to their journey, and start “spending” instead of “investing”. Only the future can tell.
The future for Zynga can be a bright one if they play their cards right. They’ve done a great job so for. Before buying breakouts on this stock, I’ll let it punch out a nice pattern that has a low risk entry point. Tech is hot.