Ahead of the Bell: Zynga to hold 'Unleashed' event

Associated Press

NEW YORK (AP) — Gamers will be tuning in to hear if Zynga has engineered any new blockbuster hits Tuesday at its annual headquarters event in San Francisco, and Wall Street will listening for the same, as well as for any hints as to how much revenue it can generate.

Robert W. Baird & Co. expects both from the maker of "FarmVille" and "CityVille," and analyst Colin Sebastian believes some of the pummeling of Zynga's stock this year has been unwarranted.

The social-media darling raised $1 billion during its December initial public offering and watched its stock jump from $10 per share to $15.91 by March, only to tumble below $5 at one point this month. The stock closed at $6.07 Monday and edged higher in premarket trading Tuesday.

Sebastian expects a broader and more diverse game slate and sees untapped advertising potential on Facebook, where most people see Zynga's games.

"According to data from the Facebook App Center, Zynga games account for eight of the top 10 apps on Facebook in terms of monetization," Sebastian wrote Monday. "Importantly, Farmville continues to monetize well, followed in the rankings by Zynga Poker, CastleVille and CityVille."

The company recently launched Zynga.com, a place for people to play its games away from Facebook — though a Facebook login is used. The website was announced at last year's so-called "Zynga Unleashed" event.

Besides its Facebook games, Zynga is known for mobile diversions such as "Draw Something" and "Words With Friends." While those games also can be played on Facebook, their smartphone versions are best known.

Baird has a $13 price target for the stock.