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Zynga: Analyst Says Now Is The Right Time To Purchase The Company

Posted on October 6, 2012 AT 03:00pm

Crash stocks, a talent brain drain, and mounting financial losses have Zynga scrambling to offset a year of huge losses, but their misfortune could be another company’s gain. Why not just buy the whole company?

That’s the question being posed by industry analyst Jesse Divnich (of the EEDAR research firm), who tells GamesIndustry that Zynga’s still-large user base could be a good acquisition for the right buyer:

“At a $1.7 billion market cap, a Zynga acquisition seems favorable for anyone looking to pick up 300 million pair of eyeballs every month,” Divnich said. “I’d argue that Facebook could become a potential suitor for Zynga–of course I am not trying to spread any rumors; rather I am thinking out loud.”

Going on to compare it to Nintendo’s role as a parent company to first-party studios, Divnich added that Facebook would make the most sense, given their heavy investments and ties with million of Zynga gamers.

At this point, a buyout is probably just what Zynga’s executives are looking for, especially since the company’s market value has tanked to $1.71 billion from a $20 billion valuation just a year ago. Their Q3 outlook alone assumes that the social gaming developer will lose $100 million dollars, which is just another nail in a very large coffin.

McKinley Noble, Contributing Editor
McKinley Noble has been writing about video games for seven years as a blogger and journalist, with each job adding to his painstakingly alphabetized collection of retro gaming memorabilia. When not cracking jokes about the gaming industry, he's a talking encyclopedia when it comes to mixed martial arts and anything MMA related. Follow him on Twitter: @KenTheGreat1. Meet the rest of the crew.

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