Zynga IPO

***ZYNGA IPO UPDATE***


The Zynga IPO, as many of you already know, is already being talked about by some, as the most sought after IPO in the last few years. On a pure interest basis, comparisons are to be Google (GOOG:NYSE) are already being made. Especially with the recent demand for other tech related IPO’s.

As some of our followers know, we make an effort to highlight some high profile public offerings, and we give color on other lesser known investment banking deals as well, but the Zynga IPO is different, much different from other deals.

Recently, some of you have watched tech IPO’s like the LinkedIn IPO (LNKD:NASDAQ) and the Pandora IPO (P:NYSE) have huge pops, but only fall back after institutions and IPO flippers came out of their allocations. The reason for the declines of the two stocks mentioned above is pretty simple. Their fundamentals don’t match the market caps for the short term. Short sellers know that even a booster shot buy recommendation from a brokerage firm can only do so much for a stock price. This is why many hedge funds short these deals when borrows become available.

Zynga’s IPO is unique though. Look at a company like Pandora, even the CEO can’t tell you when they are going to be profitable. With Zynga, it’s obviously different. Their presence on Facebook is huge and still growing. The revenues are also off the charts already and it’s not unreasonable for some to say that Zynga could eclipse the$1 billion mark in revs in the next couple of years.

Zynga’s user base is also extremely loyal even in the competitive gaming space. Games like Farmville, Cityville and Frontierville keep users coming back. Zynga’s solid brand and management also has something to do with the present valuation talk being in the $20 billion range. Keep in mind that most experts felt Zynga was valued in the $10 billion range at the time of our initial Zynga IPO profile entry.

So get ready for the hype to begin as the deal is rumored to trade in the fall. Even though Zynga’s IPO offering will be larger than some of it’s recent tech predecessors, shares will be extremely limited for retail accounts. In other words, for a deal of it’s size, Zynga will be oversubscribed to epic proportions. So please don’t be disappointed or mad at your broker if you are shutout.

Original ZYNGA IPO post below:


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Zynga IPO Gonna be Hot


zynga ipo Zynga IPOSan Francisco based social networking game developer Zynga is rumored to file for an IPO in the very near future.I has almost 250 million Facebook users and 4 of its most popular games are City Ville, FarmVille, FrontierVille and Zynga Poker. On Tuesday, Zynga just released it’s new game Empire and Allies. A move that some feel is geared towards creating even more interest in Zynga’s IPO stock offering.

In the past few months we have seen a slew of red hot IPO’s come to market, especially in the social networking space. LinkedIn IPO (LNKD:NASDAQ) was the latest, and despite the fact some are calling for a bubble in the space, it’s probably safe to say that the Zynga IPO will be heavily oversubscribed. Zynga already has roughly 250 million active Facebook users who frequent their games. The company has also been recently valued in the $10 billion range, and is rumored to have Morgan Stanley and Goldman Sachs in the running to be the lead underwriters.

Zynga Already has Profit which should help the Zynga IPO


The difference from Zynga IPO and some other the past social networking IPO’s is that Zynga already did $850 in revenue last year. The number is simply mind boggling. As we have said in the past getting shares of such a hot deal will be next to impossible on a retail basis, and that’s considering that Zynga’s IPO offering size could be considerably larger than many of the more recnt IPO’s in the space. So the best way to play it may be buying other gaming companies in anticipation of the offering. The hype from this deal could potentially move several stocks that range from mid caps all the way down to penny stocks.

So stay tuned, we will try to highlight a few different names and point out others on our stocks to watch list.

Check back for more penny stock news, IPO updates and stock market research.



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Thursday Stock Alerts CDIV, HH

CDIV, BAC, POT, HH, BAC


 Bank of America (BAC:NYSE) Today’s news of the $8.5 billion settlement and a strong market created an upward move. However, BAC is still in a downtrend, and isn’t out of the woods just yet. This still might be a good buy for investors with a long term strategy, but with so much event risk, there seems to be better banks to trade for the short term.

Potash (POT:NYSE) The Ag’s obviously have looked strong this week and POT has always been a darling of short term traders. But, there is a potential double top formation on POT and it’s just slightly above the current level. This chart pattern should be factored into your trading strategy, but a breakout is very possible.

E-Commerce China DangDang (DANG:NASDAQ) We recently issued a piece on Chinese reverse mergers and most investors know that there is a dark cloud hanging over many stocks headquartered in China. Today, DANG did buck the trend. This once hot IPO rallied nicely today and the news of the stock buyback and insider buying certainly won’t hurt.

Hooper Holmes (HH:AMEX) We highlighted this AMEX penny stock a little while back and after a nice pop, HH seems to be basing again. Hooper Holmes was a stock that was followed by several major brokerage firms and was once in the double digit range. Put HH on your AMEX penny stock list because it is in the midst of building a two year base. Remember, when the base is long, sometimes the upward move is larger.

Cascadia Investments (CDIV.PK) I know we mention this one often, but you sort of have to if you follow penny stocks. Shares of CDIV have not shown much life since the stock reopened from it’s halt. Volume was less than pathetic today and it seems like the activity in CDIV might be reduced to tax selling.

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Wednesday Stock Alerts JCOF, WTFS

KKD, JCOF, MMI, MCP, WTFS


Krispy Kreme Doughnuts (KKD:NYSE) KKD set a new 52 week high on higher than average volume, but didn’t test the $10 handle and somewhat lacked the end of the day surge that is generally seen by stocks that are breaking out. Keep an eye on this one leading into the Dunkin Brands IPO, and if you are a true speculator, KKD also has warrants.

Javalution Coffee (JCOF.PK) This high flying pink sheets penny stock came in over 8% today after a furious multi-day rally. We wrote a comparison piece earlier in the day comparing JCOF to JAMN. Shares of Javalution could still have some life if the coffee stocks remain strong. However, it’s best to watch for now, but add JCOF to your penny stock list.

Motorola (MMI:NYSE) Is it me ? Or is Motorola starting to trade like a higher priced Nokia (NOK:NYSE) ? Shares violated lows on the weekly chart and may remain weak unless there is some sort of positive catalyst. Looks like a good one to avoid from the long side for now.

Molycorp (MCP:NYSE) One day the rare earth stocks are hot and the next day they are not. Even at these reduced levels shares of MCP remain risky for longs and seem to be stuck in no-man’s land. Congress could help though, if a strategic rare earth reserve bill is brought to the floor of the House.

Xinde Technology (WTFS.OB) We issued a piece on WTFS and some of the risk involved in Chinese reverse mergers a few days back. It is common knowledge that Herb Greenberg of CNBC is bearish on the concept of these foreign names, but today, there was an even more negative, WTFS related article out of hotstocked.com. It touched on the expensive stock promotion of Xinde. Shares imploded and closed down over 36%. This one seems even too risky for long biased penny stock scalpers to play

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American Lithium AMLM

AMLM Oversold or Broken ?


american lithium amlm American Lithium AMLMAmerican Lithium Minerals (AMLM.PK) is a penny stock that we have had some success with before. As a matter of fact, it was a fairly big winner for our subscribers. At the time, lithium was extremely newsy, based on the demand for the metal in lithium-ion batteries used in cell phones, laptops and hybrid cars and trucks. Then there were news stories about events like the enormous mineral find in Afghanistan, and countries like Japan basically converting almost 3/4 of it battery use to lithium based batteries. Lithium essentially had a hot story that most industries would die for. A legitimate technological use for the metal, coupled with a green twist. A combination like this doesn’t come around often, and when it does, it generally leads to related stocks becoming very hot.

Penny stocks like Lithium Corporation (LTUM.OB) and AMLM absolutely ripped, both showing enormous gains for those who were invested. Then the mother load of all lithium penny stocks appeared on the market. The company was Lithium Exploration Group (LEXG.OB) and it’s move was a historic one, both on the way up and on the way down. LEXG ran up fast and furiously on a massive promotion, combined with some skillful PR’s. However, there was much more sizzle than steak and LEXG crumbled due to lack of fundamentals and investor confidence. The naked short sellers had a ball, and LEXG’s decline had nothing to do with the actual metal price or production.

AMLM reaps LEXG’s Benefits


During LEXG’s huge move to the upside, LTUM and AMLM also participated with brief runs dues to sympathy moves and some LEXG longs guessing that a rotation was coming into the two previously mentioned penny stocks. Then the seemingly inevitable happened, the shorts and skeptics finally were correct, and the market finally punished LEXG and it’s unsustainable market cap.

Two casualties of LEXG’s decline, were LTUM and AMLM, which seemed to be hit a little harder because of it’s pink sheets status. Now here is the tricky part. On a fundamental basis, AMLM obviously can’t be confused with other metal related stocks like Freeport MacMoran (FCX:NYSE) or US Steel (X:NYSE), because we all know American Lithium Minerals is as speculative as it gets. But, what if hybrid vehicle production rises ? How about if oil starts to rally again as it often does in the summer months ? And what about if another hot lithium penny stock appears via a reverse merger, and then subsequently creates some interest in the group. Or what if they receive additional seed money from the Japanese ?

Please keep in mind that we are not recommending that you purchase AMLM, it’s just too uncertain at this point. However, add AMLM to your penny stock list, because it doesn’t hurt to watch. The Nevada based company does have it’s Borat Hills land claims and is currently in the process of defending it’s 52 week low. So if the stars align correctly, a trade for penny stock scalpers could yet develop.

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JCOF

Is JCOF the Next JAMN ?


jcof JCOFOne thing that has been obvious this year, is that people are drinking coffee at alarming rates. Even consumption in markets like Japan is on the rise. More importantly though, investors have been bought coffee related stocks aggressively. All the way from big names like Starbucks (SBUX:NASDAQ) and Green Mountain (GMCR:NASDAQ) down to super aggressive plays like Jammin Java (JAMN:OB).

In this entry, I’d like to point out a pink sheets penny stock that seems to have garnered some interest recently. The name of the company is Javulation Coffee Company (JCOF:PK). Shares are currently down 5%, but the stock has more than tripled in the last 10 sessions on reasonably strong dollar volume. Like it’s industry peer JAMN once did, Javulation, JCOF has taken advantage of bullish sentiment in the coffee space and a stock promotion. JCOF is a roaster and distributor of gourmet and nutritional coffee’s. The company is based in Ft. Lauderdale, Florida.

Although, JCOF trades on the pink sheets which is the lesser of the two penny stock exchanges, the company seems to be fundamentally superior to JAMN. According to Yahoo Finance, JCOF has revenues in excess of $4 million. These revenues have also grown substantially on a percentage basis. The company has credited cruise line sales as a catalyst for this gain.

Is JCOF a Buy ?


Now is JCOF a buy at these levels ? I am not quite sure. We alerted our subscribers to JAMN early in it’s run, and the stock traded significantly higher, but due to our short term approach, we still left some profits on the table as shares continued to rise. However, weeks later, shares of JAMN experienced a substantial decline, which is an example of why many penny stocks can’t be held for too long. Shares of JCOF have already made a massive run, but still could attract former profitable JAMN longs if the shares pullback.

Please remember, despite the fact that JCOF seems relatively solvent, these types of penny stocks are often used best as trading vehicles. Especially after the hype starts to fade. As mentioned above, here at PSE, we try to take a shorter term approach to penny stock trading, often only staying in a stock for 1-3 days. So if you already booked a profit in JCOF, it might be best to move on. If you haven’t traded the name yet, add JCOF to your penny stock list and keep it on your watch list.


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