I have covered the stock quite extensively in recent days on TheStreet (see, for example, 3 Internet Stocks Ready to Move Higher). I continue to buy shares on weakness. ZNGA, along with Pandora (P), is easily my most aggressive long-term speculative position.
While I do not necessarily expect official word from the company on its real-money online gambling plans on Wednesday's call -- all CEO Mark Pincus has said is he was exploring it -- a story hit a gambling industry magazine earlier this week (via the Gambling911 Web site) that flew under the radar.
A paywall blocks nonsubscribers customers from the original story that appeared in eGaming Review Magazine; however, the Gambling911 Web site picked it up and summarized the part pertinent to investors.According to the magazine, as relayed by Gambling 911, "GTECH G2 and Playtech confirmed to have submitted bids to provide the social giant Zynga Poker with a real cash online poker platform." Both GTECH and Playtech offer customers interfaces that power real-money poker. That's worth keeping tabs on if you're long ZNGA, considering it or especially if you're short. Within state borders, online real-money poker is already legal in Nevada and Delaware. The two states would provide ideal testing grounds for Zynga as the company waits for the remaining legislative dominoes to fall. I received a tweet from a reader this morning asking if Zynga's future "hinges" on real-money online gambling. Absolutely not. Without out, the company still has the first-mover advantage in social gaming. It's a powerhouse of a franchise even without this possibility. Again, review my previous articles. Zynga has no debt and over a billion dollars in annual revenue as well as cash. Consider real-money games something quite a bit bigger than icing on the cake. If Zynga somehow disappoints on this afternoon's report and the stock gets nailed, I intend to add aggressively to my position. Use short-sighted noise that discounts mid- to long-term opportunity to accumulate, assuming, of course, you share bullish sentiment on the stock. Follow @RoccoPendola At the time of publication, the author was long P and ZNGA. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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