Hoping for a broad ZNGA, ATVI discussion

I am trying to figure out why ZNGA shares seem to have lost momentum despite steadily growing revenues more than 45% per quarter. One potential weakness I have observed in the business is that the number of active users does not seem to grow. This looks to be true for ATVI as well. As a result, these companies need to keep coming up with new games, which is presumably expensive can be a hit or miss. Also, the bounce in user engagement ZNGA got from Covid appears to have been very short-lived. I had some long dated ZNGA calls which I just dumped and I still own several ZNGA and ATVI shares but am contemplating dumping those as well. One thing I like about ATVI, though, at least in the short to medium term, is their chief accounting officer recently spent $80K to buy 1000 shares.


Very sorry–meant to post this to the ZNGA board.

I had owned this for a bit while it started to pick up because of COVID-19. But I just sold.

ZYNG faces challenges in its advertising business because Apple is removing IDFA from iOS which is how ad tracking for mobile app downloads works. Publishers like ZNGA are the most affected. Facebook was down this past week as well because the Facebook Ad Network said they may lose up 50% of the revenue because of this change. This means ZNGA may face a huge revenue loss in the short term.

Long-term ZNGA can double-down on other revenue streams like in-app purchases. But it’s an unknown if they can make up the losses so I sold.