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ZNGA is primed to take advantage of the online gambling opportunity. |
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Released on Monday, January 23, 2012, 11:00 PM ET
Pittsburgh, PA (SpeculatingStocks) - Zynga (NASDAQ:ZNGA), currently trading at $9.12 (Monday, January 23rd, 4:00 PM ET), has begun to pique the attention of investors and the media alike after a recent ruling by the US Justice Department. The Justice Department recently found that in-state Internet gambling doesn't violate federal law. This has opened the door up for the online poker industry, an industry that was extremely hot until the Federal government began shutting down online poker rooms a few years ago.
The online poker industry can now make a comeback depending on each state's laws. Last Friday, Zynga confirmed that the company is in active talks with potential partners in the space. Zynga is looking to "better understand and explore" the opportunity with online gambling.
ZNGA is primed to take advantage of this opportunity and would be remiss to not consider it deeply. It could certainly grow their market cap. If not entertainment gaming competitors like International Game Technology (NYSE:IGT) could take market share in the online gambling space.
ZNGA has been trading between a range of $7.97 - $11.50 and recently rebounded from its lows on speculation that ZNGA could take advantage of the online gambling opportunity. ZNGA looks like it may be overvalued right now; however, an entrance into the online gambling market could give ZNGA shares a spike to double digits again.
Zynga has over 200 million users overall and 30 million users of its Zynga Poker, which is a poker platform involving fake money. One thing is for sure, ZNGA needs to move fast as there are several experienced players in the online poker room space.
The potential of the online gambling opportunity for ZNGA is in the billions, which would mean a few dollars added to its stock price. We believe that ZNGA needs to make the move in order to grow shareholder value. An analyst just came out stating that Zynga is a "Facebook-reliant, hit-driven model." ZNGA needs to diversify now.
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