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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Zynga Shows Signs of a Turnaround to Play for Outsized Gains

NEW YORK (TheStreet) -- There's nothing like a turnaround story to play for potentially outsized capital gains, and that could be happening with Internet games maker Zynga (ZNGA).

Traders who've been around long enough to feel the elation of the well-executed bargain trade have come to realize turnaround stories offer one of the best opportunities to take the other side of a grand capitulation. Zynga ranks among those top high-profile opportunities.

Only three months after its reasonably successful December 2011 initial public offering it has been downhill for ZNGA. Investors were skittish about ZNGA's lack of depth in its bullpen of games and the company's reliance upon the third-party success of the Facebook (FB) platform.

At its peak price in $15.91 in March 2012, ZNGA plummeted nearly 87% to $2.09 per share by November. 2012. Shares currently trade at $3.32, down over 12% for the year to date.

Since November 2012, however, shrewd traders of this stock sensed too much blood in the street and bought a maligned company that still had $1.3 billion of liquid assets on its books, against a combined short and long-term liabilities of nearly half that much.

Those bold enough to realize ZNGA had plenty of time to correct a bad situation also believed a $2 share was worth a wait-and-see, especially when ZNGA's liquid assets amounted to approximately $1.50 per share.

The falling stock price provided an opportunity to reward the bold trader with a potential 181% return by March 2014. ZNGA steadily rose to as high as $5.89 from bargain hunting, short covering and, later, on optimism in July 2013 of a new experienced management team forming at the company, which is now headed by a former Microsoft (MSFT) executive responsible for successful sequels to the Xbox, Don Mattrick.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 16,880.36 -31.75 -0.19%
S&P 500 1,970.07 +0.12 0.01%
NASDAQ 4,462.9020 +20.2040 0.45%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs