Zynga shares up on takeover speculation
Zynga shares rise on speculation about takeover by Yahoo, hit highest levels in 7 months
NEW YORK (AP) -- Shares of Zynga Inc., which makes games for Facebook and smartphones, jumped Monday to their highest level since July, after the company was mentioned as a possible candidate for takeover by Yahoo.
THE SPARK: In a research note Monday, Wunderlich Securities analyst Blake Harper said that while last week's speculation about Yahoo acquisitions focused on the reviews site Yelp Inc. and reservations service OpenTable Inc., Zynga could make sense as a target, along with companies like the blogging service Tumblr and location app FourSquare.
THE ANALYSIS: Harper says Yelp is the most attractive candidate. Its market capitalization is half that of Zynga. Larger deals would be discouraged by Yahoo's shareholders who want the company to focus on improving its core business, Harper said.
San Francisco-based Zynga's fortunes have declined with the popularity of its games, which include FarmVille. It's revenue has flattened, and it is cutting jobs.
SHARE ACTION: Zynga shares rose 35 cents, or 9.8 percent, to $3.92 in afternoon trading. The shares hit $2.09 in November. That was the lowest level since the company went public in Dec. 2011, for $10 per share.
