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(USA Today)   Anytime you think that the guys on Wall Street are smarter than you, just remember this headline: "Zynga stock surges"   (usatoday.com) divider line 30
    More: Strange, Zynga, Wall Street, tides, social games, headline, blood, game companies  
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1611 clicks; posted to Business » on 25 Oct 2013 at 2:44 PM (47 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



30 Comments   (+0 »)
   
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2013-10-25 12:56:00 PM
Sure, then you buy into the stock thinking 'man these guys are smart' right before they sell it all and your shares plummet to the earth.
 
2013-10-25 01:06:05 PM
Zynga stock sores on news they only lost $68,000 this quarter.
 
2013-10-25 01:20:16 PM

impaler: Zynga stock sores


yup
 
2013-10-25 01:21:16 PM

bdub77: Sure, then you buy into the stock thinking 'man these guys are smart' right before they sell it all and your shares plummet to the earth.


This. They're trying to get a few more suckers to buy in and jack up the price just a bit more before they dump it.
 
2013-10-25 01:46:40 PM

serial_crusher: impaler: Zynga stock sores

yup


I meant to do that. Pretty witty huh?

/I didn't.
 
2013-10-25 02:50:06 PM

jake_lex: bdub77: Sure, then you buy into the stock thinking 'man these guys are smart' right before they sell it all and your shares plummet to the earth.

This. They're trying to get a few more suckers to buy in and jack up the price just a bit more before they dump it.



Maybe, maybe not.

Slate has an article about MS vs Amazon that talks about Amazon's losses vs MS profits but how the stock valuations would suggest the opposite. I don't know about that per se, but I do agree with the author's main point. Wall Street traders are just as irrational as the rest of us.
 
2013-10-25 03:01:09 PM

nocturnal001: don't know about that per se


It's because of the single most important rule of trading that a lot of Fark's business tab commenters seem to have a hard time remembering: you don't put money into a stock because it's doing well right now, you put money into a stock because you think it will do well in the future.

Amazon, despite its lack of profit, is doing well in the market because traders believe that all the money they plow back into the business (which is where the profit is disappearing to) is going to pay off in the future. Microsoft is approached with trepidation because traders are concerned about the future of its Windows 8 line in the face of dwindling PC sales, the upcoming change of leadership, etc. They believe Amazon will be profitable in the future, they are concerned Microsoft may not be, the fact that those positions are switched NOW is irrelevant.

It's the same reason you see selloffs in stock at a profitable company that doesn't quite hit expectations. The people that already own the stock expected better back when they bought it and set their goals accordingly, so when the expectations weren't met now that the future is here some of them rebalanced their portfolios by moving their money somewhere else to a company more aligned with their future plans. It's all about the future, not the now. I don't care what it's doing now, I care what it will be doing when I want to sell it later.

That said, ZNGA isn't really surging. Some suckers bought on the better-than-expected news, but the stock has been trading under $5 a share for a year and a half and it's still down well over 50% off it's IPO. It's only at $3.83 right now.

Maybe these buyers know something we don't.... but I'm not going to bet MY money on that.
 
2013-10-25 03:17:34 PM

skozlaw: nocturnal001: don't know about that per se

It's because of the single most important rule of trading that a lot of Fark's business tab commenters seem to have a hard time remembering: you don't put money into a stock because it's doing well right now, you put money into a stock because you think it will do well in the future.

Amazon, despite its lack of profit, is doing well in the market because traders believe that all the money they plow back into the business (which is where the profit is disappearing to) is going to pay off in the future. Microsoft is approached with trepidation because traders are concerned about the future of its Windows 8 line in the face of dwindling PC sales, the upcoming change of leadership, etc. They believe Amazon will be profitable in the future, they are concerned Microsoft may not be, the fact that those positions are switched NOW is irrelevant.


I definitely agree that Amazon is only headed up.  They already have a crap ton of my wallet share.

As far as MS. This kind of thing has been in my mind a lot lately, I'll have to see who out there has really examined how huge profitable companies just start to whither away due to lack of risk taking and innovation.  Nintendo is in the same boat it seems.

If I were MS I'd take some of that cash and create a bunch of Mini softs with different directives. You, take 1 billion and we want you to build goofy stuff for the consumer market, you take 1 billion and see where software and green tech meet. etc.
 
2013-10-25 03:37:23 PM

skozlaw: Amazon, despite its lack of profit, is doing well in the market because traders believe that all the money they plow back into the business (which is where the profit is disappearing to) is going to pay off in the future.


Yup. Internet companies are always at a pretty big risk of a competitor. If everyone switched tomorrow to Google+, FB would be dead. Amazon is putting lots of their profits into brick and mortar infrastructure with the goal of same-day delivery - you order in the morning, it's on your door by the time you get home from work.

Once they have that up and running, combined with a huge market of Kindle tablets and e-ink readers that make Amazon the easiest option for buying lots of digital content, it creates an enormous barrier to entry that would be hard for someone to match.

Zynga, on the other hand, has nothing but annoying ads to offer.
 
2013-10-25 04:09:21 PM
Best way to make money in the markets: but an index before it goes up, sell once it does.

Ah, I hear you say. You're such a f***ing genius that you know when the markets go up?

Yes. When more money enters the system.

Ah, I hear you say. You're such a f***ing soothsayer that you know when more money enters the system?

Yes again. First of the month, which raises the market and you sell. Or, to allow for small market downturns, sell them after the third day regardless to increase the chance of a gain and minimize the chance of holding shares on a crash day.

Sounds insane. Yet it happens every month. Over 40 million people have 401(k) plans. Their contributions are pooled at the investment companies. And at the first trading day of the month, that money gets turned into shares. That's a little bit more of that rising tide that raises all boats.

Bullcrap, you say. That'll never work.

Numbers don't lie.  Let's take 2013 so far. S&P. Doing that. Starting with $100k (excluding fees etc.)

Dec - Jan = 1426.19 to 1462.42 = $102,540.03
Jan - Feb = 1498.11 to 1513.17 = $103,570.83
Feb - Mar = 1514.68 to 1518.20 = $103,811.52
Mar - Apr = 1518.20 to 1525.20 = $104,290.16
Apr - May = 1597.57 to 1614.42 (on the 3rd) = $105,390.13 (the only month this year you had to wait)
May - Jun = 1630.74 to 1640.42 = $106,015.72
Jun - Jul = 1606.28 - 1614.96 = $106,588.60
Jul to Aug = 1685.73 - 1706.87 = $107,925.28
Aug to Sep = 1632.97 - 1639.77 = $108,374.70
Sep to Oct = 1681.55 - 1695.00 = $109,241.54

So far this year, a return of 9.24% just because the rising tide. You miss out on dividends, but the returns are higher.
 
2013-10-25 04:09:58 PM
but buyan index before it goes up

DAMMIT! ftfm
 
2013-10-25 04:16:02 PM

Jackpot777: So far this year, a return of 9.24% just because the rising tide. You miss out on dividends, but the returns are higher.


Higher than what? Do you know what the S%P 500 has returned YTD?
 
2013-10-25 04:24:20 PM
I love that headline so much.

What a joke of a company.
 
2013-10-25 04:34:15 PM

rumpelstiltskin: Jackpot777: So far this year, a return of 9.24% just because the rising tide. You miss out on dividends, but the returns are higher.

Higher than what? Do you know what the S%P 500 has returned YTD?


If it's gone from 1426 to 1695, that's about what, +18%?
 
2013-10-25 04:36:33 PM

rumpelstiltskin: Jackpot777: So far this year, a return of 9.24% just because the rising tide. You miss out on dividends, but the returns are higher.

Higher than what? Do you know what the S%P 500 has returned YTD?


SPY is up 23.54% YTD. So yeah, time the market and lose.

Three magic words for your 401K/IRA: Dollar. Cost. Averaging.
 
2013-10-25 04:46:00 PM

nocturnal001: jake_lex: bdub77: Sure, then you buy into the stock thinking 'man these guys are smart' right before they sell it all and your shares plummet to the earth.

This. They're trying to get a few more suckers to buy in and jack up the price just a bit more before they dump it.


Maybe, maybe not.

Slate has an article about MS vs Amazon that talks about Amazon's losses vs MS profits but how the stock valuations would suggest the opposite. I don't know about that per se, but I do agree with the author's main point. Wall Street traders are just as irrational as the rest of us.


The perception of what a company may soon be worth is more important than anything that company actually does, or how much money it actually makes.

If a few companies get over inflated stock prices, so what? Their stock prices are now worth more because their stock prices are worth more.

The company itself is mostly irrelevant, except if they are perceived to increase or decease their stock value doing whatever it is that they do day to day.

You know, capitalism.
 
2013-10-25 04:49:16 PM

sendtodave: If a few companies get over inflated stock prices, so what? Their stock prices are now worth more because their stock prices are worth more.


Zynga's IPO is actually one of the primary counterexamples to this; the price was massively over-inflated, and instead of making their stock worth more, it led directly to a massive correction that they're barely starting to recover from.
 
2013-10-25 05:01:11 PM
I have a younger brother who is one of those "guys on Wall Street."

He is many things (most of them not considered to be positive traits), but smarter than the average person is not one of them.

/he is, however, a consumate con man
/coincidence?
 
2013-10-25 05:06:08 PM

qorkfiend: sendtodave: If a few companies get over inflated stock prices, so what? Their stock prices are now worth more because their stock prices are worth more.

Zynga's IPO is actually one of the primary counterexamples to this; the price was massively over-inflated, and instead of making their stock worth more, it led directly to a massive correction that they're barely starting to recover from.


Well, sure, that can happen.

The point being, the value of the stock, when it was overinflated, had jack squat to do with the company. Everything else flows from that. Including that correction.

The company itself is a minor concern. Bubbles make more money.
 
2013-10-25 05:06:57 PM
An expert stock market player, with either a large enough $ load to create market moves and then capitalize on them, or sufficient expertise (insider info) to predict market movements and profit off them can afford to bet on whether the diseased crippled pony that is Zynga dies on a particular day or coughs, gets up and hobbles to the water trough for another day.

Anyone who isn't purely betting on the game itself rather than the inevitable outcome should stay away from it.  Zynga is as likely to be 100% gone 10 years from now as it is to be profitable.  The normal investor shouldn't buy and hold Zynga which means the normal investor shouldn't touch it at all.  Let the market gamers bet on its micro-ups and downs.
 
2013-10-25 05:08:00 PM

sendtodave: qorkfiend: sendtodave: If a few companies get over inflated stock prices, so what? Their stock prices are now worth more because their stock prices are worth more.

Zynga's IPO is actually one of the primary counterexamples to this; the price was massively over-inflated, and instead of making their stock worth more, it led directly to a massive correction that they're barely starting to recover from.

Well, sure, that can happen.

The point being, the value of the stock, when it was overinflated, had jack squat to do with the company. Everything else flows from that. Including that correction.

The company itself is a minor concern. Bubbles make more money.


Sure. However, "Their stock prices are now worth more because their stock prices are worth more." remains incorrect.
 
2013-10-25 05:14:49 PM
Ok, how's this:

The perception of what a company may soon be worth is more important than anything that company actually does, or how much money it actually makes.

If a few companies get over inflated stock prices, so what? Their stock prices are now worth more because their stock prices are worth more. Until the perception shifts.

The company itself is mostly irrelevant, except if they are perceived to increase or decease their stock value doing whatever it is that they do day to day.

Good? We good now? Can we focus on the point, that our whole system is based on gambling and speculation, and any reality only feeds into that bullshiat?
 
2013-10-25 05:15:21 PM
Also pertinent: The guys on Wall Street value Facebook at more than GM and Ford, combined.
 
2013-10-25 05:25:27 PM

Farkn Yaj Yenrac: Also pertinent: The guys on Wall Street value Facebook at more than GM and Ford, combined.


I was going to post "there's a difference between stock price and market capital," but I see that Facebook's market capital is indeed worth more than GM and Ford combined.

They're also worth more than Disney.
 
2013-10-25 05:27:27 PM

qorkfiend: sendtodave: If a few companies get over inflated stock prices, so what? Their stock prices are now worth more because their stock prices are worth more.

Zynga's IPO is actually one of the primary counterexamples to this; the price was massively over-inflated, and instead of making their stock worth more, it led directly to a massive correction that they're barely starting to recover from.


Zynga can EABOD.

When they IPO-ed, they told lower level employees to give back stock or lose their job. That's one of the slimiest things you can do in Silicon Valley.
 
2013-10-25 05:41:58 PM

impaler: Farkn Yaj Yenrac: Also pertinent: The guys on Wall Street value Facebook at more than GM and Ford, combined.

I was going to post "there's a difference between stock price and market capital," but I see that Facebook's market capital is indeed worth more than GM and Ford combined.

They're also worth more than Disney.


This makes sense.
 
2013-10-25 08:51:53 PM
We are smarter than you,
 
2013-10-25 09:29:58 PM

qorkfiend: sendtodave: If a few companies get over inflated stock prices, so what? Their stock prices are now worth more because their stock prices are worth more.

Zynga's IPO is actually one of the primary counterexamples to this; the price was massively over-inflated, and instead of making their stock worth more, it led directly to a massive correction that they're barely starting to recover from.


And the most rifarkulous thing is, we're going to do this all over again with King.com because they're set to IPO shortly after Twitter, and because people in mediocre suits (tech CEOs and VCs) can convince people in really good suits (investment bankers) can sell to morons in crappy suits (retail investors) that this time it's different, because Candy Crush Saga is worth more than Farmville. And because social, and because of whatever rifarkulous valuation Pinterest's Series E funding got the other day.

The easy money is being made in closed-end funds that hold pre-IPO stock of these companies, and it was made over the past four months just before Twitter filed for its IPO. The play then, as it was in the days of FB's pre-IPO weeks, is to buy when everybody's forgotten about the last successful IPO (LNKD) or mocking the latest failed IPO (FB) and the closed-end funds are trading at less than NAV. Then wait 6-8 months until the next crop of fluffy IPOs gets ready to exit, and sell the day before the highest-profile IPO of the bunch.

Difficulty: the aforementioned managers can drop a secondary offering on you at any time and you should be prepared to wait for it.
 
2013-10-26 12:05:29 AM

Jackpot777: So far this year, a return of 9.24% just because the rising tide.


Wow! That's almost half what you would have gotten by just buying an S&P 500 index fund and leaving your money the fark alone all year! Are you some kind of wizard? Do you have any other tricks to pulverize more than half of the gains I could get by doing nothing? Should I light my money on fire?
 
2013-10-26 07:31:09 AM

sendtodave: Ok, how's this:

The perception of what a company may soon be worth is more important than anything that company actually does, or how much money it actually makes.

If a few companies get over inflated stock prices, so what? Their stock prices are now worth more because their stock prices are worth more. Until the perception shifts.

The company itself is mostly irrelevant, except if they are perceived to increase or decease their stock value doing whatever it is that they do day to day.

Good? We good now? Can we focus on the point, that our whole system is based on gambling and speculation, and any reality only feeds into that bullshiat?


I would say part BS, part finance, and part gambling.
 
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