Zynga Inc (NASDAQ:ZNGA) has been on an impressive run in recent trading sessions, evoking suggestions that a bearish run that had crushed it, to all-time lows is slowly ending. Its stock has already registered a new 52 week high of $2.89 a share at the back of an impressive eight-day consecutive rally.
The impressive run is down to the launch of the company’s latest CSR Racing 2 game that seems to have gone well with gamers on both iOS and Android. Even though the stock has yet to approach its IPO, levels, a recent resurgence seems to have caught the attention of many investors.
The company’s biggest challenge has always been its ability to transition from one hit game to another swiftly. The rate, at which its monster hits fade, continues to be its biggest challenge, which has consequently affected its sentiments on the street seen by the stock price.
Catalyst behind Rally
The release of CSR 2 cannot be the only catalyst behind the recent rally. Zynga has evolved in the recent years from over relying on one title, to focusing more on web-based titles such as Zynga Poker, Hit it Rich Slots and Wizard of OZ Slots.
Other possible catalysts on the stock could be investors taking note of the fact that suitors are starting to pay interest on companies that are in charge in the social gaming business. King Digital and Supercell have already received buyout offers, which continues to fuel talk that one could be on the way for Zynga.
Amidst a wave of uncertainties, Zynga is still a compelling option for a company looking to take advantage of its solid pipeline of games. The big question now is whether a buyout offer will come soon. That is the only way the company will be able to build up on the recent rally as CSR 2 popularity could fade.
Even with a lack of a buyout offer, Zynga Inc (NASDAQ:ZNGA) remains well positioned to produce another blockbuster given the size of its balance sheet.