Zynga Inc (ZNGA)’s 10% Pop: A Triumph of Hope Over Reason

Page 2 of 2

I don’t doubt that Mattrick is a talented and experienced executive — in many ways, he’s an ideal hire for the role. However, I question whether he can reverse the tide for Zynga Inc (NASDAQ:ZNGA), faced, as he is, with a business that looks largely ephemeral. I’m certain there is a durable market of some size for social networking games. The trouble is, it’s difficult to say what size that is and whether it can support Zynga’s current valuation (we already know it can’t support the valuation the company achieved early on in its life as a public company.)

Today’s news is favorable for Zynga Inc (NASDAQ:ZNGA), but investors who bid the shares up 10% are making a long-shot bet and the stock isn’t anywhere near cheap enough to justify that.

The article Zynga’s 10% Pop: A Triumph of Hope Over Reason originally appeared on Fool.com.

Fool contributor Alex Dumortier, CFA and The Motley Fool have no position in any stocks mentioned. You can follow Alex on LinkedIn.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Page 2 of 2