ZNGA's current market cap is $3.5B. But it has about $1.2B in cash, and little debt. Regardless of how you feel the games, they do have a real business, so if Instagram is worth $1B to Facebook, ZNGA must be worth somewhere north of $2.5B, its current enterprise value.
You may call their business a real business but fact of the matter is that "real business" is handing them huge losses every quarter, so if they do not improve things drastically soon, that cash will not last them long.
Also, bookings were up. I think it's important to note that after FB's updated S1 everyone had worried since Zynga comprised less of Facebook's Q1 revenue. What all news outlets failed to note is that FB credit associated purchases didn't go down but actually ad impressions on Facebook's part. It's possible Zynga is trying to drive pageviews of their own network rather than Facebook. (Check the S1) [2]
[1]: http://venturebeat.com/2012/04/26/zynga-beats-q1-earnings-es...
[2]: http://sec.gov/Archives/edgar/data/1326801/00011931251217567...
This doesn't make sense. Facebook does not own stock market, neither they are some sort of a measurement for other transactions.
Zuck bought it because it was last moment to spend money they didnt have and clearly it was a threat to FB userbase (but sooner or later another Instagram will come up that FB cannot afford). Further Instagram deal was a scam [1] that hopefully will get investigated by Sec (?), for all FB shareholders' sake.
[1] http://www.donnaklinenow.com/investigation/instagram-scam
That being said, ZNGA makes roughly $1B in revenues, which gives them 2-3x current revenues. I perceive that as being cheap, but I could very well be wrong. I'm just placing my bets, and if they don't turn out, then I'll sell at a loss.
Often on HN, any non-negative mention of Zynga will be downvoted.
But I do agree with everyone. :) Yes, it's annoying. Yes, it was a fad, initially. But yes, there must be some enduring value in the business model, after the bubble bursts and people start thinking more rationally about it.
Citation? SEC filings say they are losing money at a rapid clip.
Just because Mark Zuckerburg acquired a company for a Billion dollars that had NO revenue, NO customers, and NO business, doesn't mean the rest of the investment world is smoking the Social Network crack pipe.