Zynga Stock Has Huge Day After Disney Deal

Analysts are slowly becoming more bearish toward Starbucks

Patrick Martin
Aug 22, 2018 at 2:34 PM
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Stocks are a mixed bag today, with the Dow poised to snap its four-day winning streak, while the Nasdaq pushes higher. Looking at individual names, internet game developer Zynga Inc (NASDAQ:ZNGA) is enjoying a solid day, while tech stock Super Micro Computer, Inc. (NASDAQ:SMCI) and coffee giant Starbucks Corporation (NASDAQ:SBUX) are in the red. Here's a closer look at what's moving shares of ZNGA, SMCI, and SBUX.

Disney Licensing Deal Lifting ZNGA

Zynga stock is up 7.9% to trade at $4.04, after the developer announced a licensing deal with Walt Disney (DIS) to develop a "Star Wars" mobile video game. An analyst at Baird believes the deal gives the "Farmville" creator a better chance to hit its long-term growth targets. ZNGA is on track for its best day May 2017, and is now trading above its year-to-date breakeven level of $4. The shares have vaulted past their 50-day moving average as well, a trendline of resistance in place for the last month.

Calls have been quite prevalent in recent weeks. On the International Securities Exchange (CBOE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open nearly 35,156 calls compared to just 346 puts in the past two weeks. The resultant call/put volume ratio of 101.61 is five percentage points from an annual high. Today is more of the same, with ZNGA options flying off the shelves at double the typical intraday pace, with the September 4 call leading the charge.

Delayed SEC Filing Sparks Put Trading on SMCI

Super Micro Computer stock is down 16.5% to trade at $15.33, and earlier touched a nearly five-year low of $14.20, after the company disclosed it will miss its 10-K filing deadline for its fiscal years of 2017 and 2018. This is pacing to be SMCI's worst single-session loss since April 2016, and brings its year-to-date deficit to 19%. 

With the stock currently on the short-sale redistricted (SSR) list, options traders are flocking to puts today. Over 15,000 puts have exchanged hands today, 35 times what's typically seen at this point in the day, and volume already at an annual high. The top contract today is the September 15 put, where Trade-Alert is identifying sell-to-open activity, meaning traders are betting on a short-term floor for the shares.

Analyst Downgrade Drags SBUX Lower

This morning, Piper Jaffray downgraded SBUX to "neutral" from "overweight" and said it expects the stock will struggle until U.S. business improves. In response, Starbucks stock is down 1.8% to trade at $53.04. The equity had been rallying since its late-June lows below $48. After today's pullback, though, it appears the shares will be turned away at their 100-day moving average. 

Despite a few cautious notes recently, analysts lean bullish on SBUX. The stock sports 14 "buy" or better ratings, along with 11 "holds" and zero "sells." Furthermore, the security's 12-month price target of $57.96 is a nearly 10% premium to its current perch. 


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