In Play: Virtual Farm-Backstopped Default Delay Securities Launched After Zynga Implodes

Tyler Durden's picture

UPDATE: ZNGA is down 40% now, trading with a $2 handle

They said it could never happen. They said it was social, mobile, everything... Well, oops... It seems the drought conditions around the world have hit the virtual farms too. Let it 'Virtual Rain'

  • *ZYNGA 2Q REV. $322.5M, EST. $343.1M                 
  • *ZYNGA 2Q ADJ. EPS 1C, EST. 6C                        
  • *ZNGA SEES YR EPS ADJ 4C-9C, SAW 23C-29C, EST. 27C   

and with that 33% 40% of market cap is wiped away... and the derivative play - Facebook is down 7% after-hours and EURUSD is dipping as all that virtual cash is vaporized (yes seriously EURUSD is dropping!). We assume that very soon, congressmen around the country will be calling for a government intervention as the hand-of-god impacts these poor virtual farmers. FYI - Margin Stanley is the largest ZNGA holder at 13.84%.


and since the IPO...

Finally, as a reminder, ZNGA priced its follow on on March 28 at $12.00,
three months after IPOing. Morgan Stanley made money on both events.
Will MS now also be the advisor on the firm's eventual Chapter filing?
Too bad there are no assets to liquidate, unless of course DIP lenders
accept virtual stuff for LTV calculations. 

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hedgeless_horseman's picture



I felt a great disturbance in the Farce, as if thousands of Menlo Park citizens cried out in terror and were suddenly silenced. I fear something terrible has happened.

FB crushed in after hours. -2.22%

HoofHearted's picture

"I only want to see you standing in the virtual rain. Virtual rain, virtual rain...."

Back when he was known as Prince before he was Symbolman before he was Prince again...

TruthInSunshine's picture

Virtual rain, such a timeless classic...


Hey, are the virtual regulators going to force the actual TBTF banks to take any virtual haircuts the next time they receive actual bailouts again?

billsykes's picture

Aw look, groupon and Zynga are tracking down together, isnt that cute, shit does sink to the bottom.

AldousHuxley's picture

Zynga's founder (ex-bankster) asks for bailout of his virtual farm foreclosures.

Tippoo Sultan's picture

The flames from this particular roach motel inferno are licking at the heels of the usual institutional arthropods: Capital Research, Federated, Morgan Stanley, and that perennial mo-mo whipping boy, Fidelity.

malikai's picture

Yep. Those floaters just need a little time for the gas to come out.

John Law Lives's picture

Since you mentioned Prince, I couldn't resist posting this.  This song is a cover of 'Raspberry Beret' as sung by Warren Zevon + 3 former members of REM.  This is awesome (much better than Prince's version - imho)...

Crank it up!

Tippoo Sultan's picture

"Dirty Mind" was Prince's last worthwhile LP...

Once he embarked upon his sanitized movie/soundtrack odyssey, it was frankly all downhill from there.

Frederic Bastiat's picture

hahahah, hedgeless that was one of the best comments I've ever seen on here. 

The Limerick King's picture



Zynga is facing a drought

Their future is surely in doubt

Their online manure

Has lost its allure

And Farcebook is facing a rout 

AldousHuxley's picture

don't invest in any startup featuring dogs headed by ex-bankster


TruthInSunshine's picture

Limerick King is in the house.

Time to break out the finest champagne (ala LIBORlicious) and get this party started.

The Limerick King's picture

Thanks Truth...I know I haven't been posting much the last few months, but my heart is always at the Hedge!

billsykes's picture

After all Zynga only lost 478m net against 90m profit in the last 4 years. But still valued at 3.74 Billion?

I smell a big bonus for all the insiders via a big steaming pile of debentures very soon.




DormRoom's picture

Groupon is next.. web 2.Oh my god, what a pump n dump.

Muppet of the Universe's picture


Disclosure:  Short Znga 500,000,000 shares.

ebworthen's picture

Hedgeless Horseman said:  "as if thousands of Menlo Park citizens cried out in terror and were suddenly silenced."


Watching Chipotle and Green Mountain Coffee crash were almost as enjoyable.

When the hoity-toits can't afford Whole Foods anymore that one will be really fun to watch get monkey-hammered.

natty light's picture

Will Pandora's Box be opening soon?

Winston Churchill's picture

Or even:

I felt a great disturbance in the Bourse today.

ZeroAvatar's picture

Obi-Wan Hollande, you are our only hope.  Obi-Wan Hollande, ................

LeisureSmith's picture

Well, Facebook is down 8 pct. and i am drunk. Happy times.

ZeroAvatar's picture

(Voice of Darth Vader)  "Let him go, STAY on the Leader".

StychoKiller's picture

The Dept of Cyber-agriculture is pressing Congress for cyber-subsidies for virtual-farmers...

Ineverslice's picture


And, may the Farce not be with you (HT HedgelessHorseman).

Lost Wages's picture

When is FB earnings report? :)

Tim Knight from Slope of Hope's picture

Tomorrow (Thursday) after the close. LULZ guaranteed.

hack3434's picture

+ 268mm shares will be unlcoekd (3months after IPO) and then another 1.7b by the end of the year. 

ghostfaceinvestah's picture

You mean selling stuff to kids with no jobs and boatloads of student debt and whose parents are underwater on their mortgage and have no jobs isn't a sustainable business?

RockyRacoon's picture

They could always slaughter some of that virtual livestock and have a virtual feast. 

The actual weight loss might bring them back to reality.

John_Coltrane's picture

Yep, thought their business "model" was a little weak when I bought my Znga 5 puts a few weeks back.  Even I didn't imagine this kind of blood bath so soon though.  I rolled by GRPN puts from 20 to 13 and recently to Jan 8s.  Based upon my ANR, FLSR, FB, and LVS (also getting killed afterhours) puts , I think its a lot easier to ID the companies with bad business models than good ones. 

Darkness's picture




Darkness's picture


veyron's picture

DST couldnt give a shit about the price: their basis is so low that a sub-penny price could come close to rendering the investment breakeven ...

Mr Lennon Hendrix's picture

This will usher in the deflation you have all been waiting for.  Any minute it comes....

...any minute now....

chet's picture

Yes, I suspect the price of shitty social networked video games is about fall significantly.

Robot Traders Mom's picture

It seems the drought conditions around the world have hit the virtual farms too.


I don't throw 15 year-old girl acronyms around lightly, but ROFL!!!

TruthInSunshine's picture

You can thank your son for the more and more frequent puking-up-blood episodes.


Just sayin'

ihedgemyhedges's picture

Zynga, it was nice knowin' ya..........

Strider52's picture

Ya know, last night I played Zynga No Limit Texas Hold 'em for the 1st time in 4 months. Coincidence? I think not...

IndicaTive's picture

Looks like Farmville needs to implement a virtual PIK program. Pronto.