Boston, MA 02/20/2014 (wallstreetpr) – Zynga Inc. (NASDAQ:ZNGA) with its ventures of developing, marketing and operating online social games traded a 52 week on Tuesday, after its subsidiary King Digital Entertainment announced plans to offer an IPO to potential investors. The high mark was only short lived as 24 hours later the company’s stock slumped by 2% on intraday trading session.
A lot waits to be seen of what impact the $500 million IPO by King digital entertainment will have on Zynga stock in the coming months. This also leaves lots of concerns of whether king’s shares will struggle in the market as is the case with Zynga which has been facing a stream of challenges.
Zynga Inc. (NASDAQ:ZNGA) on Wednesday announced a patent licensing agreement with Personalized Media Communications, a licensing agreement it intends to use in enhancing its content and media delivery.
Zynga Rated as a sale
The positive news from King seems not to have major effect on Zynga ratings by research firms. The company is currently rated as a sale due to a number of weaknesses it is showing in the market. TheStreet rates it’s as a sale with a rating of D+. Its performance for the current quarter has elicited lots of concerns due to the number of challenges it is facing in the market.
Zynga Inc. (NASDAQ:ZNGA) continues to face challenges with its operating cash which has been dwindling, falling to low levels of $7.73 million a decline of 60.9% compared to the same quarter a year ago. Zynga cash flow growth rate also falls below the industry average. The company is also faced with declining gross profit margins which is at a record high of 84.84%. Zynga revenue continues to decline at a faster rate than the industry average, having dropped by 43.3% compared to the same quarter a year ago.
Zynga Inc. (NASDAQ:ZNGA) settled on a share price of $5.07 on Tuesday trading session having dropped by 1.55%
