Northern, WI  11/30/2012 (BasicsMedia) —  If i were FaceBook (NASDAQ:FB) I would want to own  Zynga (NASDAQ:ZNGA) at much lower prices than today.  Currently, Zynga is worth about $2 Billion on paper and the way things are going for many Social Media stocks Zynga’s valuation can fall much, much more than it did in 2012.  I want to buy (ZNGA) because it is insurance if legalized gambling comes to the US.  In fact –  I believe (and this is purely my guess – I have not seen this anywhere else) –  this a calculated move by Zuckerberg and company to buy Zynga for around $500 Million which is  about 70% lower than today’s trading price of $2.43, and to put a share price on it would come in under $1.00.

Zynga’s real money UK poker customers recently joined the bwin.party dotcom player liquidity pool – getting the benefits of playing on the largest regulated poker network andwill also leverage the company’s world renowned entertainment brand, FarmVille, to offer local players the first-ever, online Farmville-branded real money slots game. Zynga’s UK-based RMG service will operate under bwin.party’s Gibraltar gaming license.  In reality this is the only asset Zynga has and it’s worth about $500 million dollars.  It’s basicly a $500M Long Call for for potential revenue in online gaming which FaceBook could afford to buy at the right price.

I would expect FaceBook to start backing up the truck under $1.00 p/s for Zynga (NASDAQ:ZNGA)  more like 70 cents per share.  At that price you own the company at a good valuation…and yes… shares can fall to that price based on today’s news and the price action of Social Media stocks like Groupon (NASDAQ:GRPN) and other’s.  While we are on the subject of Social Media stocks, I also expect (for the record) that Groupon (NASDAQ:GRPN) will go out of business and be de-listed as a public company and Pandora (NYSE:P) will be absorbed by a larger player yet to be determined.  Keep in mind these are my observations and I would not enact trading positions based on my speculated outcomes.  My reasoning for these ideas survives in the articles written and research done on the sector, but more importantly, I have seen fad based consolidation in other sectors and it looked exactly like this.

The Social Media sector will look much different at the end of 2013 and it’s cool to watch as things unfold -trading it however – is a completely different story…so do your homework, have a plan and watch your step!!!

Disclaimer:  We have no position in any stock mentioned here, and we do not give trading advice we are technology journalists observing culture..we do not trade.

 

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