This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Zynga Is a Chinese Takeover Candidate at Content Hungry Web Sites

NEW YORK (TheStreet) -- Unlocking Zynga's (ZNGA - Get Report) upside potential may happen sooner than expected if content hungry Chinese firms have their way. China's mobile gaming market is growing at an estimated 20% a year and worth about $3 billion.

I think Zynga is a value buy with many possible paths higher. I wrote a Real Money Pro post with exact entries and profit targets that you will want to take a look at.

ZNGA Chart

In comparison, the U.S. mobile game market is valued at $3.2 billion and showing signs of maturity. Industry experts believe the Chinese mobile game market will overtake the U.S. this year. There are already more smartphones in China than the total U.S. population. Worldwide, the 2014 mobile game market is anticipated to exceed $21 billion in revenue.

You may have played one of the many Zynga games and King Digital's (KING) Candy Crush Saga, but are you familiar with Crossfire by G4Box? Crossfire claims 400 million or more users and is the world's number one revenue generating freemium game. In 2013, Crossfire produced almost a billion dollars in revenue.

Chinese gamers started playing Crossfire in 2008 when Asia's largest Internet company, Tencent Holdings bought the Chinese rights. Shenzhen, China-based Tencent Holdings trades on the Hong Kong exchange.

Tencent Holdings bought the Candy Crush Saga Chinese version rights and is in an arms-race for market share against the likes of Baidu (BIDU) Alibaba Group. Yahoo! (YHOO) owns about 24% of the soon-to-IPO Alibaba. It's an IPO that will provide Alibaba and Yahoo! plenty of cash to use for expansion.

Tencent Holdings' war chest is also expanding based on Tencent Holdings' earnings report this month.The company reported a 60% jump in first-quarter profit and stated it intends to leverage its WeChat platform to market mobile games.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
ZNGA $2.45 0.00%
AAPL $124.75 0.00%
FB $80.78 0.00%
GOOG $524.05 0.00%
TSLA $206.79 0.00%


DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs