In recent times Zynga Inc (NASDAQ:ZNGA) is losing a foothold in its own game. Shareholders are watching 73% of their savings depleted in virtual tubes. The main reason behind this is the Zynga Inc (NASDAQ:ZNGA) interest in gambling, will it lead the company to profitability? Only time will tell, but there is reason to rejoice as the company as applied for gaming license by the Nevada Gaming Control Board. Can Zynga Inc (NASDAQ:ZNGA) turns the tide after a year of lawsuits and ghastly management decisions.
As the year is drawing to its final days people look back on how the the year has been but the people and investors at Zynga Inc (NASDAQ:ZNGA) are avoiding to look at the past 365 days. The company has been through a lot with falling stock prices in a difficult first year in the public markets. When the company released it dim second-quarter earnings statement which led an investor to file a class action suit for misleading the investors on lower counts, game release delays and subsequent fall in the revenues. This followed by a severe attrition saw some of the top brass to move over to competitors’ company. The thing which hit Zynga Inc (NASDAQ:ZNGA) most is the take over of OMGPOP which contributed to $180 million which had written off its balance sheet.
The company’s salvation was heard when Mark Pincus CEO of Zynga Inc (NASDAQ:ZNGA) announced the company has officially applied for a license to the Nevada Gaming Control Board which bought back the investors in buying mode raising the stock upto 7%. Zynga Inc (NASDAQ:ZNGA) has the potential and a large user base for making a significant impact in online gambling, which was shut down in the U.S. last year. The company Zynga Poker is still one of the best popular online poker games. The company has the necessary skills to move forward in this platform. But it should also be noted not all gain from gambling.
The worrying thing for Zynga Inc (NASDAQ:ZNGA) will arise mostly from its competitors who will populate when the domain is again a legal enterprise. One such competitor is PokerStars, Zynga Inc (NASDAQ:ZNGA) must try to get those players to switch over from that platform to theirs which is not an easy job as users are loyal to their platform. The other competitors will include MGM Resorts International (NYSE:MGM) and Wynn Resorts, Limited (NASDAQ:WYNN) both of the have applied for a license to the Nevada Gaming Board. Bally already owns a license, They are not technology oriented companies so it would be interesting to see what sort of platform they provide. But these guys have been swimming in the gambling water for a long time and it will prove to their advantage.
The road that Zynga Inc (NASDAQ:ZNGA) is taking will not turn around the fortunes of the company in a single day nor will give a guaranteed venture. The investors need to be cautious if they are to consider the recent developments. Although the company is out of troubled waters as it was once before a cautious and a restrained approach is necessary until a clearer path opens up in the future.
Shares Value of the following:
Zynga Inc (NASDAQ:ZNGA) were down by 0.19% to close at $2.62.
MGM Resorts International (NYSE:MGM) was up by 0.97% to close at $11.43
Wynn Resorts, Limited (NASDAQ:WYNN) was up by 0.67% to close at $114.22.