Zynga stock had unusually large dark pool prints on Friday, September 6, 2019. The first dark pool print was for 1.37 million shares at $5.83 with an estimated value of $8 million. Then another dark pool print valued at $5.1 million hit in after-hours trading. The combined two dark pool prints represented 11% of the total daily volume in Zynga stock.
Zynga is a provider of social game services. The company develops, markets and operates social games as live services played on mobile platforms, such as iPhone Operating System (iOS) operating system and Android operating system and social networking sites, such as Facebook.
The dark pool trades look like buy orders as the options flow shows front running of the huge dark pool prints.
Bullish options flow was detected in Zynga stock on September 6, 2019, with 17,478 calls trading, 6x expected, and implied vol increasing over 1 point to 34.57%. Oct-19 $6 calls and Sep-19 $6 calls are the most active options, with total volume in those strikes near 9,200 contracts. The Put/Call Ratio is 0.02.
Another reason we think the dark pool prints were buy orders is that on the daily chart, a major support level has formed with the stock chopping out sideways as the Twiggs Money Flow rises.
On August 29, 2019, Zynga announced that country music icon Trisha Yearwood will be featured as a welcoming farmhand avatar in FarmVille 2: Country Escape along with her new single, “Every Girl in This Town,” starting on September 9. The special appearance celebrates the company’s 10 year anniversary of its FarmVille franchise and Ms. Yearwood’s highly anticipated new album, Every Girl.
Ms. Yearwood will provide fans an exclusive sneak peek of her in-game avatar during her #EveryGirlRoadTrip, which kicks off tomorrow. Ms. Yearwood goes back to her Georgia roots to retrace the path she took to Music City to follow her dreams before she became a country superstar. The special tour kicks off in her hometown of Monticello, GA on Friday night, followed by stops in Georgia and Tennessee. Her final destination will be the Country Music Hall of Fame and Museum in Nashville on Sunday– where she was once a tour guide. Ms. Yearwood’s avatar will be making special appearances throughout the road trip.
“Seeing what my avatar looks like in FarmVille 2: Country Escape brings back fond memories of my country roots,” says Trisha Yearwood. “Just as this album reminds people that it’s OK to be whoever you are, FarmVille offers a similar experience and lets you customize and build your farm just how you’d like.”
“We’re delighted to have Trisha Yearwood celebrate FarmVille’s momentous anniversary and share her music in FarmVille 2: Country Escape,” said Bernard Kim, President of Publishing, Zynga. “FarmVille is one of the most beloved game franchises in the world and we look forward to finding new ways to surprise and delight players, especially with the new FarmVille mobile title we’re developing.”
Ms. Yearwood’s avatar and single will be featured for a limited time in FarmVille 2: Country Escape September 9–October 9, 2019.
On August 29, 2019, Baird analyst Colin Sebastian said the recent weakness in Zynga shares is a buying opportunity. The analyst remains upbeat on its prospects to generate solid growth and improving margins over time, with management highlighting good visibility into bookings despite certain timing of new title launches. Sebastian reiterated his Outperform rating and $8 price target on Zynga stock.
On August 27, 2019, Webush added Zynga stock to its Best Ideas List as it thinks that key titles “Empires & Puzzles” and “Merge Dragons!,” along with three new releases later this year, have the potential to drive significant upside to the Street’s expectations through 2021. As such, the firm expects the shares to trade closer to its price target over the remainder of the year. Wedbush analyst Michael Patcher has an Outperform rating and $9 price target on the Zynga stock.
We are not adding Zynga stock to the long-term buy and hold GST Portfolio because the stock does not meet the stringent requirements for inclusion. In particular, Zynga stock trades at a P/S of 5.04. The market cap of Zynga is $5.3 billion but the company did just $1.05 billion in sales last year. Nevertheless, readers may be able to capture quick profits in a short-term swing long trade on a breakout of the rectangle basing pattern on the daily chart.
Disclosure: We do not hold any position in ZNGA stock.