During the second week of April, I will be watching Zynga (ZNGA). On April 3rd, Zynga announced that it will be entering the real-money gambling arena in the United Kingdom. This is huge news for a company that has only provided pretend, non-cash gaming up to this point.
Many will argue that poker has not been in the mainstream for a couple of years, but only because of the policies and laws put in place by US lawmakers. A few years ago, it was extremely simple to fund on online gambling account on sites such as Party Poker, Bodog, Bookmaker or any number of other outfits. However; if you visit many of those sites today, you will find a domain that has been seized by the US government.
Online Poker in Las Vegas and New Jersey
Last month, online poker was legalized in Las Vegas and New Jersey. Soon, interstate deals will be reached , allowing online poker in most of the fifty states. Of course, this will have no impact on Zynga next week, but I would expect them to be a major provider of the software in years to come.
Zynga experienced a pretty good run up last week, closing at $3.55, but if technicals are any indicator (no pun intended), there’s still room to go. The stochastics are no longer oversold, but they are not at overbought levels either.
Soon, a sell-off will occur, but the stock could reach highs of $4.00 before that occurs. If we see a breakout above $4.00, look for the stock to reach levels not seen since July 2012.
Last Week’s Pick
Last week I chose Facebook as my stock of the week. Over the one week period, Facebook increased from $25.58 to $27.39 for a gain of 7.07% – not bad for five days . Intraday Friday, the stock actually hit a high of $27.80.
Much of Zynga’s gain occurred last week, but I believe it will still be a very interesting stock to watch for the next five days.