Zynga Inc’s stock rose 14 percent on Monday as investors grew more confident that the social games developer behind “FarmVille” and “Mafia Wars” will deliver a solid set of quarterly results next week.<\/p>\n
Its shares ended trading at $2.84, up 35 cents<\/p>\n
Zynga reports quarterly results next Monday. In October, it raised the lower end of its 2012 earnings forecast and also announced a $200 million share buyback plan and a new partnership with British company bwin.party to offer online real-money gambling.<\/p>\n
Last month, it put in a preliminary application to run real-money gambling games in Nevada.<\/p>\n
Analysts said there was no news that caused the spike<\/p>\n
Arvind Bhatia, an analyst at Sterne Agee, said, “Outside of Apple, it feels a little bit like we’re in a little bit of bull market in tech. A lot tech memes are up even without any news. This one was perhaps underowned and maybe that’s why people are saying in 2013 that’s one they want to own.<\/p>\n
“Volume is three times the normal volume and stock is up 13 percent and that’s clearly telling you somebody’s buying.”<\/p>\n
“They scheduled an earnings call for next Tuesday and haven’t preannounced, so perhaps investors are feeling good about the quarter,” said Wedbush Securities analyst Michael Pachter.<\/p>\n
The “FarmVille” creator has struggled to hold on to users for once-popular titles it publishes on Facebook, and is shifting focus to capture growth in mobile games.<\/p>\n
Zynga is hoping that a lucrative real-money market could make up for declining revenue from games like “FarmVille” and other fading titles that still generate the bulk of its sales.<\/p>\n
Last year, the games publisher carried out 11 of the planned shutdowns of 13 underperforming game titles, including simulation games like “Petville” and “FishVille.”<\/p>\n
As part of an on-going cost-cutting plan, Zynga laid off 5 percent of its full-time workforce and shut its Boston office last year and said it might consider closing its Japanese and British game studios.<\/p>\n
“A lot of it is going to depend on Zynga’s cost-cutting and there’s are still a lot of issues as they don’t have the advantages from their previous relationship with Facebook,” said Sterne Agee analyst Bhatia.<\/p>\n
Zynga poker exec jumps ship<\/strong><\/a><\/p>\n Zynga\u2019s weak mobile move, loss of casual gamers turns serious<\/strong><\/a><\/p>\n Zynga outlook bleak as FarmVille fades<\/a><\/strong><\/p>\n