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

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.