Why Zynga Shares Popped

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Zynga have popped today by as much as 11% on speculation that Yahoo! could acquire the social game maker.

So what: Wunderlich Securities analyst Blake Harper is the source of the speculation. He suggested that the search engine could scoop up Zynga, as it's been on an acquisitive streak of late. New CEO Marissa Mayer has made many changes at Yahoo!, including numerous acquisitions related to social media, such as Alike and Snip.it, among others.


Now what: Harper mentions that recent speculation revolved around possible targets like restaurant reservation maker OpenTable and reviewer Yelp, but he believes that Zynga would also make sense. The analyst also considers Tumblr and FourSquare as possible candidates. Harper notes that Yahoo! has lost market share in display advertising since Mayer became CEO, and expanding the company's social presence would be the right move.

Interested in more info on Zynga? Add it to your watchlist by clicking here.

Zynga's post-IPO performance has been dreadful, and investors are beginning to wonder if it's "game over" for this newly public company. Being so closely tied to the world's largest social network can be a blessing and a curse. You can learn everything you need to know about Zynga and whether it's a buy or a sell in our new premium research report. Don't even think about picking up shares before you read what our top analysts have to say about Zynga. Click here to access your copy.

The article Why Zynga Shares Popped originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool recommends OpenTable. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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