Opinions
Keith Richards
Zynga
ZNGA-Q
WATCH
May 03, 2013
Stock price when the opinion was issued
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Long ZYNGA (ZNGA-q) and Short Facebook (FB-Q)? A pairs trade that he would probably not put on in his funds. This one’s is interesting but its business model has run into a lot of problems and come under a lot of pressure. One of those sort of failed tech IPOs but is a very beaten up stock. Has quite a bit of cash on their balance sheet. Facebook, on the other hand is a really good business, great company but expensive. Has always found with pairs trade that trying to buy a value, kind of “not great” company at a low price and short a really good company at an expensive valuation to play that spread, typically does not work out well.
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. A social gaming company. Insiders owns shares and have been buyers. The space remains competitive with hits or fad-like games. It is harder and more expensive to be competitive on the crowded platform. Unlock Premium - Try 5i Free
This could be a classic rounded bottom, or cup and handle. Cup was August to April and handle SHOULD have been after that. But it didn’t break out and moved down instead. One has to be a little skeptical, although it could still break out.