Retail Sales Exascerbated by Haves and Have Nots?

December 13, 2011

CNBC.com Article: Holiday Sales Appear to Stall: Are Big Discounts Next?

Retailers are seeing sales dry up halfway through the holiday sales period, a consumer survey shows, which may force discounts as deep as 70 percent as Christmas Eve approaches.

Full Story:
http://www.cnbc.com/id/45643812

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Downgrade Shmoungrade as Long as Your Short Something

December 13, 2011

CNBC.com Article: EU Debt Summit Fails to Satisfy Ratings Agencies

Moody’s Investors Service said on Monday it intends to review the ratings of all 27 members of the European Union after EU leaders offered “few new measures” to resolve the crisis in a summit on Friday. Fitch Ratings and Standard & Poors issued similar statements.

Full Story:
http://www.cnbc.com/id/45642833


SEC Putting Commodore 64s to Good Use

December 1, 2011

A fun and disturbing read.

http://dealbreaker.com/2011/12/sec-putting-its-commodore-64s-to-good-use/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+dealbreaker+%28Dealbreaker%29


Mark Pincus to Spend Personal IPO Proceeds Buying Emoticons to Pick Up Chicks Using Location Dating Service

December 1, 2011

Zynga profiting from virtual goods sold to real people with real money who are virtually supporting themselves.

Funny I would be curious to know what amount of those virtual goods are bought using a parents credit card with virtual permission to do so. And how much of the balance of their customers are un- or under- employed.

With unemployment at 9%, #OWS raging against wealth inequality, and most people busy working to live, who the fuck has the time or money to buy virtual shit. For god sake, dinner, a movie and a baby sitter cost at least $200 these days so who the fuck has extra cash for game credits?

May just be a sign of how crappy the real world is: “Dude, I can’t pay my rent in real life but I just bought a sick ocean front dream home in HamptonsVille. Come over on Sunday I’m throwing a housewarming party.”

WTF?

I would bet a buck that Mark Pincus does not spend the proceeds from his IPO on virtual hookers.

The current success if this business model has got to make the top ten list for why America is going to suck for a long time.

I can’t wait for the next generation of American kids to grow up and show us adults how silly our primitive use of all this amazing new technology really is!

Zynga Said to Plan IPO Valuing It at as High as $10 Billion.

Dec. 1 (Bloomberg) — Zynga Inc., the biggest maker of games on Facebook Inc., is seeking a valuation of as high as $10 billion in an initial public offering, according to two people briefed on the matter.

Zynga plans to raise about $900 million by selling shares at about $8 to $10 apiece, said one of the people, who asked not to be identified because the plans haven’t been made public. Zynga would sell 10 percent or fewer of its outstanding shares, which are scheduled to be priced on Dec. 15, the person said.

At $10 billion, Zynga would be valued at below the $14.05 billion that the company said in regulatory filings represents its fair value. Zynga would also be the second-largest U.S. game company after Activision Blizzard Inc., which has a capitalization of $14.2 billion. Electronic Arts Inc., which bought Zynga rival PopCap Games in August, has a market value of $7.69 billion based on yesterday’s close.

Zynga would be valued at as much as 9.8 times trailing 12- month sales, compared with about 3 times for Activision and 2 times for Electronic Arts, according to data compiled by Bloomberg.

Dani Dudeck, a spokeswoman for San Francisco-based Zynga, declined to comment.

Paying Customers Climb

Under Chief Executive Officer Mark Pincus, Zynga aims to capitalize on the popularity of social networks and virtual goods. The company lets users play games for free and then makes money by selling items — say, a townhouse in “CityVille” or a shipyard in “Empires & Allies.” Zynga is pressing ahead with IPO plans even as other Internet companies that recently sold shares, including Groupon Inc. and Angie’s List Inc., get hammered. Both were trading yesterday below their offer prices.

Founded in 2007, Zynga has hired Morgan Stanley and Goldman Sachs Group Inc. to manage the IPO. Zynga’s shares will trade on the Nasdaq Stock Market under the symbol ZNGA.

Zynga updated its filings on Nov. 4 to show that 6.7 million of its users were paying customers in the first nine months of the year, up from 5.1 million in the year-earlier period. Revenue more than doubled to $828.9 million.

The worldwide virtual-goods market will more than double to $22.5 billion in 2015 from $9.27 billion last year, according to Lazard Capital Markets.

To help it add more customers hungry for virtual goods, Zynga is stepping up spending on research and marketing — which in turn is crimping profit. The company posted $30.7 million in net income in the nine months that ended in September, down from $47.6 million a year earlier.

Dependent on Facebook

In October, Zynga announced a new service, called Project Z, geared toward reducing its dependence on Facebook users. The company also introduced new games, including “Zynga Bingo,” “CastleVille” and “Hidden Chronicles.”

Ninety-three percent of Zynga’s third-quarter revenue was generated on Facebook, the world’s most popular social network. That number has ranged between 91 percent and 94 percent since the beginning of last year, according to Zynga filings.

Adding more mobile games is part of Zynga’s plan to diversify. The company said in November that the number of daily active users on mobile devices increased more than 10-fold from November 2010 to September 2011, reaching 9.9 million. By October, the number was 11.1 million.

Facebook, the world’s largest social networking service, is also making preparations for an IPO. The company is considering raising about $10 billion in a deal that would value it at more than $100 billion, a person with knowledge of the matter said this week.

Jive Software Inc., the maker of social-networking software for businesses, seeks to raise as much as $117 million in an IPO that would value it as high as $573 million, the Palo Alto, California-based company said in a filing yesterday.

Reuters reported Zynga’s valuation yesterday on its website.

To contact the reporters on this story: Douglas Macmillan in New York at dmacmillan3 Lee Spears in New York at lspears3

To contact the editors responsible for this story: Tom Giles at tgiles5 Jennifer Sondag at jsondag

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