Gustavo Ballvé on July 26th, 2012
Food for thought, Home, Industries, Investment Themes, Media, Mental models, Portfolio Management, Risk management, Signal or Noise, Tech

Back from my honeymoon, it’s a bit of a shame to kick things back into movement by such a “noisy” story, but Zynga’s crash (down 39% as I write) after horrible results yesterday is still worth mentioning. It’s one of those classic cases where a good business model does not necessarily imply a good investment – and in Zynga’s case, the assertion that it was a good business was never a sure thing. Zynga affects Facebook’s revenues, so FB is also down 8% as I write. It’s too early to tell whether Facebook is a clear social media winner, and if it will be a good investment even if it does “win”. And it’s way too early to tell who will make money from “Web 3.0” apps and games running on the social media platforms (the “Web 2.0”). It doesn’t make it less interesting to follow the industry – quite the contrary – but it highlights the dangers of hype, extrapolations, unearned convictions and so on. Inside, I collect a few links on this developing story.

Zynga misses sales, profits estimates – Bloomberg

Zynga reports sluggish second quarter – NYT

Zynga insiders who cashed out before the stock crashed – Yahoo! Finance

Zynga’s plunge triggers short-selling restriction – WSJ.com

Five questions for Facebook’s first earnings report – WSJ.com

Video: Top Zynga games lose at least 20% of users – Bloomberg

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