Why Zynga beats King

Zynga (NASDAQ:ZNGA) has been a strong speculative bet for a while since it has undergone some key changes including leadership and acquisitions. New CEO Don Matterick, ex-Microsoft executive, was able to steer Zynga into $5.50 range but preventative caution commentary has triggered to a constant downfall in the price for Zynga, which is currently trading in the $2.90 range. King Digital (NYSE:KING) has with the introduction of their games, including Candy Crush, put Zynga stock under immense pressure and investor scrutiny.

However Zynga is rethinking and drawing a circle of competitive advantages with the acquisition of NaturalMotion for USD$527 in January 2014. The team at market leading NaturalMotion has been involved in games like Grand Theft Auto V, Clumsy Ninja and CSR Racing. NaturalMotion brings a european culture across to Zynga with a strong focus on building emotional connections for gamers with strong character IP’s and have a history of powering some of the biggest video games and even blockbuster movies.

Zynga has set itself up to win in social and mobile gaming and we should see IPO investors to regains some of the massive write downs by mid 2015 at the latest.

We are firmly long on Zynga and believe any stock under USD$3 is a strong bet for the bulls.

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