Zynga and the Market
http://money.cnn.com/2012/10/24/technology/zynga-earnings/index.html
Zynga, the social gaming company that has introduced popular games like Farmville and Scramble with Friends, has seen a marked increase in sales that brought up their shares by 15%, just after the company showed lower expectations for 2012 and lost over 75% of its market value this year. Furthermore, Zynga has announced a partnership with bwin.party, an international gaming operator that introduces Zynga to the field of real-money casino games. Moreover, Zynga has purchased the gaming company OMGPop, the maker of the popular smartphone game Draw Something.
Zynga’s continuous fluctuations in the stock market and business decisions regarding its new partnership and purchase. Zynga serves as a “seller” in the market place — a seller of games, as well as of stock. Its buyers look for the games it produces or its stock, and the demand for the stock fluctuates depending on a wide range of factors, include the company’s revenue. The projects that Zynga has recently undertaken is likely to widen its buyer pool on several fronts, thereby increasing its stock sales.
Buy acquiring OMGPop and taking steps to widen its product range into the realm of real-money casino games, Zynga is increasing its network of potential buyers to include previous customers of OMGPop and those interested in mobile gambling. Previously, Zynga’s games were more attractive to those in a younger age group. However, with the addition of real-money casino games, Zynga may be able to pull in older individuals who are drawn to mobile gambling. By increasing the number of buyers “pointing” to the seller in the network, Zynga, it is highly possible that Zynga would be able to increase revenues. This in turn would make its stock more attractive to the buyers in that market.
Furthermore, an increase in the popularity of the Zynga’s stock would bring more to the “traders” that buy and sell Zynga stock on the market. Increasing the number of buyers who choose to purchase through these intermediaries is likely to bring a higher profit to the traders.
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The projects that Zynga has recently undertaken is likely to widen its buyer pool on several fronts, thereby increasing its stock sales.