Zynga IPO Values Company as High as $9.04 Billion

Tallahassee, FL 12/2/11 (StreetBeat) -- Zynga Inc plans to sell an 11.1 percent stake in a scaled-back initial public offering that would value the Facebook game maker at as much as $9 billion on a fully diluted basis. The leading social games maker plans to sell 100 million new shares at between $8.50 and $10 each, according to a U.S. regulatory filing on Friday. At the midpoint price, the IPO could raise $925 million, which would make it the largest from a U.S. Internet company since Google Inc (Nasdaq:GOOG) raised $1.7 billion in 2004.

Five-year-old Zynga made its name on viral games such as "FarmVille," among the most popular on the Facebook social network. While Zynga's games are free to play, the company makes money from selling virtual items -- such as tractors and weapons -- that players then use.

Based on a fully diluted share count of 904 million, which includes existing shares and stock options, the IPO price values Zynga at $7.7 billion to $9.04 billion. In a filing two weeks ago, the company said a third-party analysis had valued it at $14.05 billion. While the valuation has been cut, Zynga would still be among the largest publicly traded U.S. game developers after it debuts on Nasdaq under the "ZNGA" symbol.

Video game developer Activision Blizzard Inc (Nasdaq:ATVI) currently has the industry's highest market value of $14.2 billion, followed by Electronic Arts Inc (Nasdaq:ERTS) at $7.7 billion.

Zynga's debut will follow IPOs this year from Groupon Inc (Nasdaq:GRPN) and LinkedIn Corp (NYSE:LNKD), which helped revive a market that had sputtered in recent years. Facebook is gearing up to go public next year.

Mark Pincus, a serial entrepreneur before he founded Zynga, will hold a class of shares with 70 times more voting power than the regular stock that will be sold in the offering.

Google, one of the early investors in Zynga, will be offering about 1.7 million shares, according to a regulatory filing. Other companies selling shares include Institutional Venture Partners and Union Square Ventures. Deep-pocketed rivals from Walt Disney Co (NYSE:DIS) to Electronic Arts are starting to muscle in on Zynga's turf.

The company said its IPO represented 14.3 percent of 699 million common shares, excluding restricted stock.

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Zumba Fitness Craze Makes Majesco Entertainment Stock Look Undervalued

Austin, TX 11/18/11 (StreetBeat) --Majesco Entertainment (Nasdaq: COOL) is a small capitalization video game maker who specializes in motion captured games as well as games for handheld devices and social platforms like Facebook. It is today’s release of Zumba Fitness 2 that brings me to write about Majesco stock.

Majesco Entertainment has been around since 1986 and has just recently this year had a string of success. Cooking Mama, a tycoon like game for Nintendo DS, was the first game to really get the company going again in the 2000s and helped the company gain entry into today’s video game market. The biggest success now for the company is the Zumba franchise. Video game companies continue to put out interactive games to give users the full experience with the Nintendo (NTDOF.PK) Wii and Kinect from XBOX. Games like Wii Fit, Just Dance, Wii Sports, and now Zumba Fitness have helped users interact with their games while also getting some sort of workout while playing video games.

Zumba Fitness has sold over four million copies worldwide. The game is actually selling faster than several debut games from popular series including Guitar Hero. The newest version of the game features twenty four different types of dances and a whole new soundtrack. Players of the game will be able to track calories burned for the first time on screen. Zumba Fitness Rush will be released for XBOX 360 exclusively in February of 2012. The Zumba games previously were only available on the Nintendo Wii.

The last earnings report put out by Majesco for the third quarter showed earnings per share of $0.04 (up from a loss of -$0.03 last year third quarter). The company raised guidance of $0.35 to $0.38 for the fiscal year ending October 31st, 2011.

The lineup for the rest of 2011 looks promising for Majesco Entertainment.

-Hulk Hogan’s Main Event -the first motion controlled wrestling video game.

-Twister Mania-interactive party game for Kinect

-Alvin and the Chipmunks:Chipwrecked-For Kinect, Nintendo DS, and Nintendo Wii, features 30 songs and corresponds with the launch of the newest Alvin and the Chipmunks movie in December, 2011

-Motion Explosion-interactive family game

-Several games for the Nintendo DS including Camping Mama, Cooking Mama 4, Jaw, Pet Zombies

Just like other video game makers, Majesco is trying to increase its presence in social gaming through Facebook. An acquisition of Quick Hit this past year showed the seriousness of Majesco’s intentions on social media. This past quarter several games were released on Facebook for Majesco including: Quick Hit NFL, Parking Wars 2, and the latest Cooking Mama social game.

The Zumba Fitness game is sold overseas by various other companies through a license with Majesco Entertainment. The game is a bestseller in other countries as well and has been on the bestselling list in the United Kingdom for some time now.

Shares sold for less than $1 at the beginning of 2011 and have since rose up nicely to its current mark between $3 and $4. With earnings of $0.35 for this year, shares trade at less than 10x earnings per share. This nice small cap stock looks to be undervalued. If the company can continue to sell Zumba Fitness 2 well or turn out more games it could be a great growth stock and increase up to $10. I think before this happens the company will be bought out. Large video game companies like Activision (ATVI) and Electronic Arts (ERTS) are always looking for ways to strengthen their portfolio. I would be curious to see if Activision, who abandoned their once fad game Guitar Hero would be interested in taking on the current video game trend once again.

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Electronic Arts Inc. (NASDAQ: ERTS) Raises Forecast Less Than Expected, Shares Fall

Tallahassee, FL 10/28/11 (PennyPayDay) -- Electronic Arts Inc's (Nasdaq: ERTS) second-quarter results beat Wall Street estimates and the video game maker raised its earnings forecast because of the upcoming holiday title "Star Wars: The Old Republic," which it expects to be a hit. But EA's shares fell more than 4 percent in after-hours trading because investors were puzzled the company did not raise its earnings outlook by more.

For the full year, the company raised its outlook to a range of 75 cents to 90 cents per share, compared with a previous range of 70 cents to 90 cents. Raising the low-end of its outlook by a nickel was not enough for Wall Street, which had hoped EA would post a stellar second-half of the year. Some analysts are expecting full year EPS to be as high as $1.13 per share, according to Thomson-Reuters I/B/E/S. "People were expecting a bit more and wondering what is happening in the ongoing quarter, so they are taking the stock down," said Sterne Agee analyst Arvind Bhatia. For the full-year, the company now expects revenue of $4.050 billion to $4.20 billion, ahead of analysts' expectations of $4.1 billion.

The company's finance chief Eric Brown said in an interview the company is raising its earnings outlook on the strength of digital revenue, which comes from online games that can be played on PCs such as "Star Wars. "We're quite confident that we're going to easily clear $1 billion in overall digital revenue in our full fiscal year 2012," Brown said. "Hundreds of thousands" of people have pre-ordered "Star Wars," the online game that EA hopes will rival Activision Blizzard's "World of Warcraft," which has more than 12 million subscribers. EA is said to be spending more than $100 million to develop "Star Wars." The game comes out on December 20.

EA, like many video games companies, is starting to offer a wide range of games played over the Internet and on Facebook, to compete with upstarts such as Zynga, which develops simple, casual games. The company wants to sell more digital content to consumers because it has higher margins than selling games to consumers on discs and does not have to give a cut to brick and mortar stores such as GameStop Corp.

EA said on Thursday that six million customers have downloaded the digital platform it unveiled earlier this year, where users can download full-PC games directly from EA. Gamers will be able to download the Star Wars game over that system.

Brown, the CFO, also said EA's highly anticipated shooter game, "Battlefield 3," which came out earlier this week, "is meeting expectations." "We think the title will do well, not just in the launch week, but into the holiday season and into next year as well," he said. EA's aim is to gradually chip away at Activision Blizzard Inc's (Nasdaq: ATVI) "Call of Duty" series and gain enough momentum to take the crown back from its rival in the next few years.

In the quarter ended September 30, the second-largest U.S. video game publisher's adjusted revenue rose 17 percent to $1.03 billion, which beat analysts' expectations for $966.56 million. The main drivers were sales of EA's sports games such as "FIFA 12" and "Madden NFL 12," which were up 20 percent from a year earlier. Taking into account the deferral of digital revenue from online games, EA's adjusted earnings per share was 5 cents per share, which breezed past Wall Street's expectations of a loss of 4 cents per share.

EA shares were trading more than 4 percent lower at $23.30 in after-hours trading.

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Top Large Cap Tech Stocks

The following is a list of large-cap tech stocks. Judging by their earnings results relative to analyst estimates over the last year, it's clear that these tech giants are being underestimated by analysts.

To create this list, we started with a universe of large-cap tech stocks. We the collected earnings surprise data on all these stocks, and narrowed down the list to the companies that have the highest average earnings surprise rate over the last year.

How long will their winning streak continue, and how long until the good news fully priced in? Details below.

The list has been sorted by the average earnings surprise over the last year.

1. SanDisk Corp. (SNDK): Semiconductor Industry. Market cap of $8.89B. The company has outperformed analyst earnings estimates by an average of 72.46% over the last year. Short float at 7.38%, which implies a short ratio of 1.42 days. The stock has gained 75.68% over the last year.

2. Yahoo! Inc. (YHOO): Internet Information Providers Industry. Market cap of $21.05B. The company has outperformed analyst earnings estimates by an average of 63.54% over the last year. Short float at 4.77%, which implies a short ratio of 2.34 days. The stock has gained 0.62% over the last year.

3. Applied Materials Inc. (AMAT): Semiconductor Equipment & Materials Industry. Market cap of $16.54B. The company has outperformed analyst earnings estimates by an average of 62.43% over the last year. Short float at 1.8%, which implies a short ratio of 1.22 days. The stock has lost -2.75% over the last year.

4. Activision Blizzard, Inc. (ATVI): Multimedia & Graphics Software Industry. Market cap of $14.01B. The company has outperformed analyst earnings estimates by an average of 39.81% over the last year. Short float at 4.1%, which implies a short ratio of 2.02 days. The stock has gained 0.78% over the last year.

5. United Microelectronics Corporation (UMC): Semiconductor Equipment & Materials Industry. Market cap of $7.46B. The company has outperformed analyst earnings estimates by an average of 38.52% over the last year. Short float at 0.39%, which implies a short ratio of 3.75 days. The stock has lost -22.43% over the last year.

6. Apple Inc. (AAPL): Personal Computers Industry. Market cap of $275.65B. The company has outperformed analyst earnings estimates by an average of 33.25% over the last year. Short float at 1%, which implies a short ratio of 0.47 days. The stock has gained 45.17% over the last year.

7. Autodesk, Inc. (ADSK): Technical & System Software Industry. Market cap of $8.02B. The company has outperformed analyst earnings estimates by an average of 27.25% over the last year. Short float at 3.98%, which implies a short ratio of 2.86 days. The stock has gained 30.67% over the last year.

8. Intuit Inc. (INTU): Application Software Industry. Market cap of $15.1B. The company has outperformed analyst earnings estimates by an average of 25.43% over the last year. Short float at 1.98%, which implies a short ratio of 1.44 days. The stock has gained 56.72% over the last year.

9. Teradata Corporation (TDC): Diversified Computer Systems Industry. Market cap of $6.51B. The company has outperformed analyst earnings estimates by an average of 21.49% over the last year. Short float at 0.96%, which implies a short ratio of 0.93 days. The stock has gained 29.27% over the last year.

10. Rogers Communications Inc. (RCI): Wireless Communications Industry. Market cap of $20.36B. The company has outperformed analyst earnings estimates by an average of 19.99% over the last year. Short float at 3.82%, which implies a short ratio of 49.79 days. The stock has gained 17.99% over the last year.

11. Garmin Ltd. (GRMN): Scientific & Technical Instruments Industry. Market cap of $5.68B. The company has outperformed analyst earnings estimates by an average of 19.53% over the last year. Short float at 16.84%, which implies a short ratio of 13.09 days. The stock has lost -3.13% over the last year.

12. Intel Corporation (INTC): Semiconductor Industry. Market cap of $117.58B. The company has outperformed analyst earnings estimates by an average of 17.64% over the last year. Short float at 0.96%, which implies a short ratio of 0.78 days. The stock has gained 6.09% over the last year.

13. Maxim Integrated Products Inc. (MXIM): Semiconductor Industry. Market cap of $6.61B. The company has outperformed analyst earnings estimates by an average of 17.05% over the last year. Short float at 7.69%, which implies a short ratio of 6.35 days. The stock has gained 24.8% over the last year.

14. Flextronics International Ltd. (FLEX): Printed Circuit Boards Industry. Market cap of $5.29B. The company has outperformed analyst earnings estimates by an average of 16.8% over the last year. Short float at 2.61%, which implies a short ratio of 2.95 days. The stock has lost -5.6% over the last year.

15. Dolby Laboratories Inc. (DLB): Diversified Electronics Industry. Market cap of $7.21B. The company has outperformed analyst earnings estimates by an average of 16.61% over the last year. Short float at 7.3%, which implies a short ratio of 5.51 days. The stock has gained 48.84% over the last year.

16. Advanced Semiconductor Engineering Inc. (ASX): Semiconductor Equipment & Materials Industry. Market cap of $5.47B. The company has outperformed analyst earnings estimates by an average of 16.42% over the last year. Short float at 0.29%, which implies a short ratio of 4.12 days. The stock has gained 0.22% over the last year.

17. Agilent Technologies Inc. (A): Scientific & Technical Instruments Industry. Market cap of $12.2B. The company has outperformed analyst earnings estimates by an average of 16.19% over the last year. Short float at 1.68%, which implies a short ratio of 1.79 days. The stock has gained 18.83% over the last year.

18. Avago Technologies Limited (AVGO): Semiconductor Industry. Market cap of $5.89B. The company has outperformed analyst earnings estimates by an average of 16.11% over the last year. Short float at 4.45%, which implies a short ratio of 2.6 days. The stock has gained 53.08% over the last year.

19. Cree Inc. (CREE): Semiconductor Equipment & Materials Industry. Market cap of $6.11B. The company has outperformed analyst earnings estimates by an average of 16.07% over the last year. Short float at 21.78%, which implies a short ratio of 4.68 days. The stock has gained 18.11% over the last year.

20. Microsoft Corporation (MSFT): Application Software Industry. Market cap of $218.76B. The company has outperformed analyst earnings estimates by an average of 16.06% over the last year. Short float at 0.94%, which implies a short ratio of 1.14 days. The stock has lost -13% over the last year.