NEW YORK (TheStreet) Despite all the problems the company has gone through over the past two years, shares of Zynga (ZNGA) - Get Report were surging 20.79% to $4.30 after the mobile games maker reported fourth-quarter earnings, made a major acquisition, and said it would be cutting 15% of its staff.

For the fourth-quarter, Zynga reported a net loss of $25 million, as daily active users (DAUs) fell to 27 million. That's down from the loss of $49 million in the year-ago period, when the company had 56 million DAUs, but up from the third-quarter net loss of $68,000. The company lost 3 cents on a per share basis, topping estimates by a penny.

The San Francisco-based firm also said that it's implementing a cost cutting plan that will include a 15% workforce reduction of about 314 employees and lowering its spending on datacenter infrastructure. Zynga estimates that its cost reduction strategy will lead to pre-tax savings of $33 million to $35 million in 2014.

Zynga said it expects between $760 million and $810 million in 2014 bookings, versus Wall Street estimates of $629 million.

Zynga also announced it would spend $527 million in cash and equity to buy privately-held, UK-based mobile game developer NaturalMotion, in an effort to accelerate the company's mobile growth.

Analysts by and large were positive on the quarter and acquisition, with some boosting their price targets. Here's what a few of them had to say:

UBS analyst Eric Sheridan (Neutral, $4 PT)

"Zynga also announced an agreement to acquire NaturalMotion - a mobile game and technology developer - for $527mm in cash and equity (based on Zynga's Jan 29th closing price). NaturalMotion expands Zynga's creative pipeline into two new categories - racing (CSR) and people simulation (Clumsy Ninja) - and brings along proprietary technology, tools, and talent. At closing, NaturalMotion's shareholders will receive $391mm in cash & approx. 39.8mm shares of Zynga stock. The deal is expected to be accretive to non-GAAP earnings, generating bookings of $70-80mm and adjusted EBITDA of $15-25mm in 2014. Zynga also announced plans to implement a 15% global workforce reduction (expects $33-35mm in pre-tax savings in 2014) and noted its victory in a patent lawsuit alleging I/P infringement on the part of Zynga."

Jefferies analyst Brian Pitz (Hold, $3.50 PT)

"While Zynga's 4Q13 results continued to be challenged, the company announced a $527MM acquisition designed to add hit games to its library at a somewhat lofty valuation. We maintain our Hold as the number of users playing Zynga's games continues to decline."

Credit Suisse analyst Stephen Ju (Undperform, $4 PT)

"Similar to moves we have seen with other publishers, Zynga is looking to aggressively pivot its operations to target the global smart phone user base, and the acquisition extends it a more rapid entry into mobile gaming, which is an area historically lacking in its portfolio. The acquisition and concurrent work force reduction signal to us that the new management team Mr. Mattrick has assembled is now looking to growth as opposed to portfolio rationalization. We maintain our Underperform rating for now but do acknowledge that Zynga is at a key inflection point and the main catalyst for us to change our investment stance will remain the creation of new franchises with the technology assets as well as talent from NaturalMotion."

BMO Capital Markets analyst Evan Williams (Market Perform, $4 PT)

"The performance was driven by better-than-expected bookings and further headcount reductions as the company continues to realign its cost structure. We expect 1Q14 to be a trough quarter with the company returning to growth in 2Q14, boosted by several key titles as well as contribution from NaturalMotion. In our view, NaturalMotion is a complementary strategic fit for Zynga - extending its reach into two additional genres (racing and people simulation), accelerating its mobile growth with NaturalMotion's titles and development
talent, and providing new technology platforms that improve its ability to deliver hit titles."

--Written by Chris Ciaccia in New York

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