Transcript for Zynga to Begin Trading: Biggest IPO Since Google
Dow futures were up out of the bell this morning. Can't discuss all the business headlines at this -- Alix Steel from the street can't -- to see you happy Friday at so let's put that thing up offering we've been buzzing about this is the biggest Internet yes and -- right absolutely -- priced at about ten dollars a share which means it they're trying to raise about one billion dollars. Compare that you Google would type in 2004 they tried to -- just under two billion dollars this is a really big deal. They need ironing teams of course right but the question is are actually worth it -- an analyst come out before the IPO who actually said that stock was worth seven dollars a share which implies. 30% downside -- things like growth is slowing even faster than what you would think. Margins being under pressure free cash well actually declining recently. And -- 94%. Of this company's revenue comes from FaceBook it's a -- close tie. To the social media company yet totally dependent on FaceBook at this point -- -- talking about -- yes. Let's revisit Michael course which started trading yesterday which expected. Just not the stock to do so Alan it's Thursday you know 20% I have to say yeah because this company isn't like bingo or isn't -- -- -- Let's look at the -- financials its fiscal year 2011 revenue -- 58%. Same store sales stores open for more than a year were up 48%. Net income. 85% in where's the recession here from Michael -- right and look at the actual store growth we have they grew its base from 73 locations in 2009 to more than 200. Stories in October 2011. And it expects to expand to a total of 600 stores so this really good growth they're making money and -- -- and a lot of potential there obviously for investors aren't -- on and talk about the Consumer Price Index. Which was released an hour ago the overall number came in flat but how it's on the sub categories like energy food and clothing to write this you break it down like you said overall inflation as flat actually about 3.4 percent year on year that was lower than October's reading. When you break it down that when you exclude food and energy and you look at the court was actually up two tenths of a percent that means you're paying more for shelter for medical care for personal goods for clothing. That's underlying inflation they tend to take out the food and energy because that's very very volatile and subject to external factors but the cooler is what matters and actually rose -- -- you're an -- she point 2%. The reason why that's important -- you have to look at them at the Federal Reserve is going to do. Are they going to look at overall inflation -- you know what it's slowing that's not so that we can pump some more money into the system to help the economy ground war. I think the court and say it's -- over 2% 2% is our target. That's old 1980 inflation -- moderating as quickly as we've got now we have -- whole -- pumping more money into the system that's going to be what investors are looking -- today. OK and six has downgraded -- number of the country's top banks this is getting a lot of scrutiny how seriously should we be taking us. Well it's serious for Bancshares and received at -- Fitch cut the rating on you know bank America. Goldman Sachs Citigroup -- that was JPMorgan and Morgan Stanley UBS. The issue here is that we have the rating agencies that cannot -- -- their models that's why we're gonna get these downgrades but -- share price -- -- -- the worst performing sector at and -- this year something like seventeen out of the eighty stocks in the sector. Our only in -- -- territory for the year that's pretty terrible. BankAmerica overall is one of the worst performing -- of all the S&P prettier they really don't need that in it really don't need the risk of perhaps higher borrowing costs which is what it down actually desperate. Speaking of terrible. Out right now for Research in Motion of course -- maker of the Blackberry. I understand that company hopes to turn things around with more advertising is that going to be enough. Yeah I don't think so I mean. And that's -- your hopes on something very specific and a lot our problems and that I Latin music terrible because -- where they reported last night at the bell was a real. Nightmare yes -- actual earnings for the third quarter came in above expectations -- remember that they guided lower in early December. But the outlook that was pretty terrible they expect to make about -- eighty -- 95 cents a -- in the next -- -- 20% lower than analysts were expecting. Revenue coming in about 4% lower -- -- analysts were expecting just under five billion. We're looking Smart -- shipments at between 111000012. Million compared to over fourteen million that we are looking for and to top it all off. They're pushing back the launch its next generation Blackberry software system that was coming -- -- game changer here. To the latter part of 2012. So. Not only is that you know advertising -- not gonna help those used but where's the catalyst -- actually gonna push rim higher. And -- -- to look at the ratings to get a downgrade today as well but hold and sell equipment ratings outnumbered -- readings I told not. This year -- down 74%. For the year. What is also might do is kind of rampant speculation if -- does now make even a better takeover target for perhaps the Hewlett-Packard's of the world. -- -- -- -- -- This and try really break into this marks on business. And might actually benefit from having the software and and taken over rim and -- having the device sort of -- them together like apple they do seem vulnerable at this point okay. -- let's talk about your specialty goal that's a big story this week we have seen prices dropped sharply in the past few weeks is losing long term chayet. Away from the metal what do you make of this. I visit there a lot of factors that are hurting the market right now short term but the longer term you have to look at the factors that -- local. To -- and -- had deflation worries lowering prices you have a European possible -- and gold has been trading with the -- in adversely to the dollar the dollars in Nazi haven penalties that all currencies. But the underlying factors here at what countries -- been doing its biting deeply and an incompletion incompletion lines in the day meeting pumping more money in the system it means printing more money and that always is an environment that's good for a -- you also -- this negative real interest rates when police and -- -- -- interest rates. Also a good environment literally a dollar in the bank is worth less and gold then becomes a -- -- access to holes. But that doesn't mean it's not really scaring investors. Yeah apps and this is such a controversy -- -- yesterday Jeff -- our guests. On the opening bell basically saying get -- -- as soon as possible. You're view perhaps that investors may step and and Bible for the long turn add in Jeff -- -- that directed a high diesel hit young and I can hear from traders is that they're really freaked out so they're they're treating -- really -- -- -- get around like we're seeing to it probably in itself they need to make some cats. And I mean buying I did so we're gonna see this range bound action and some very big volatility for a long time -- -- -- like twelve months long time. But if you look at the longer term trend I think you're gonna see buyers who want to hold this for ten years they -- take this opportunity to step -- An investment. -- -- -- -- spoke cat in this though capital excuse me had a note I was really interesting said the six times prior sentence and night 1976. The -- closed below its 200 day moving average -- the dairy scary technical level that that it broke on Wednesday. Gold on average has written about half a percent in the next week. One and a half percent in the next month and the -- percent in the next three months 9% in the next six months -- -- 1%. In the next year on average. -- has rallied 17%. Annually each year it's currently still up 11% so there's still more real here percent. -- -- -- these flat so the question is does history repeat itself -- let's move on to figure the Euro has also been taking a tumble moving forward what UC for the currency. Deals of the senate is so negative for the -- and it still bullish for the -- have to whiners and contrary investors -- -- -- in and you'll switch your roots here. We're also seeing some possible short covering so investors -- in -- -- -- I back at lower prices that's an atmosphere up a little bit. We have some kind of headline news -- -- -- -- today we have new Italian leader Merriam -- winning that I have confidence in parliament. I now has pushed through that thirty billion euros austerity cuts. It through parliament's lower house is an adult leader today and -- -- later in December -- -- are now under that 7% level that's very good sign and it ticket perhaps any other EU meeting next week -- back to create a lot of volatility that OK taking on -- -- at the -- before we let you go -- the Dow up I 85 points right now at the end of this week in news and driving markets today. -- I think -- is -- looking to next week to say are we see some kind of Santa Claus rally and ended the year where fund managers kept piling into good performing stocks to show investors that they own it return a profit. And -- bond portfolio managers say you know what we concede. An avenue and you really un prepared which is getting even elevate at Santa Claus rally I think that's gonna start looking for. All right Mary Christmas Alex is out on the street banks -- -- -- Alex you bet.
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