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MarketFoolery

MarketFoolery: 02.14.2011

MarketFoolery

The Motley Fool

Money, Business, Motley, Business News, Stocks, News, Investing, Market, Fool

4.71.7K Ratings

🗓️ 14 February 2011

⏱️ 11 minutes

🧾️ Download transcript

Summary

According to reports, social gaming company Zynga is now valued at more than seven billion dollars. Is the company behind the virtual hit FarmVille worth really worth that much? JPMorgan Chase is planning to start a fund for social media companies. Is this a savvy investment or just the latest sign of a tech bubble? Facebook's valuation is roughly the same as Disney's. Which company would you rather own in five years?

Transcript

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0:00.0

It's Monday, February 14th, and this is Market Fullery.

0:05.0

I'm Chris Hill and joining me in studio today from Motley Pool Stock Advisor, Jason Moser,

0:09.0

from Income Investor James Early, and from Million million dollar portfolio Ron Gross.

0:13.4

Guys, happy Valentine's Day.

0:15.0

Happy Valentine's Day.

0:16.0

Happy Valentine's Day.

0:18.0

We've got Groupon's latest stumble and a new fund aimed at social media companies.

0:22.0

And speaking of social media companies,

0:23.8

we're going to start today with Zinga.

0:25.5

This is the social gaming company that produced Farm Bill,

0:29.5

Farmville, excuse me, which is the game on Facebook

0:31.9

where you basically have a cyber farm

0:34.7

that you can tend to and buy crops and animals and all that sort of thing.

0:38.0

Well Zinga is talking with potential investors looking to raise a quarter of a billion dollars which would value

0:45.0

the company at more than seven billion dollars. Jason, according to reports

0:50.2

last year Zinga made 400 million in profit on 850 million dollars in revenue.

0:56.4

That was just some nice numbers.

0:58.2

Tipping 50% margins there.

1:00.2

I mean you know it kind of goes back to what we were talking about with Twitter last week and absurd valuations, at least with Zinga, I mean, the valuation is a little bit more to earth, but, you know, Ron had made a good point just shortly ago but how sustainable is that

1:13.6

business model even to begin with I mean you run that a good point let's back up

1:17.1

once every month or so I try I'm in with something let me just ask this I read that they

1:22.0

said that they don't even actually that they said that they don't. But they're doing this anyway.

...

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