Zynga Stock Skyrockets on Take-Two Takeover

ZNGA is on track for its biggest daily jump on record

Digital Content Manager
Jan 10, 2022 at 10:29 AM
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The shares of Zynga Inc (NASDAQ:ZNGA) are up a whopping 48.3% to trade at $8.90 this morning, following news that the online gaming company will be acquired by sector peer Take-Two Interactive (TTWO) in a deal worth $9.86 per share in cash and stock, or roughly $12.7 billion. Meanwhile, Take-Two stock was last seen down 12.8% to trade at $143.52. 

Today's pop has ZNGA trading at its highest level since September, when the equity's attempt to close an early August bear gap ran out of steam at the $9.10 level. The 50-day moving average has also kept a lid on shares, though the stock is currently gapping above this trendline as it paces for its biggest daily jump on record. Year-over-year, however, the shares still sport an 11.5% deficit. 

Short sellers were hitting the exits ahead of today's news, with short interest down 26.5% in the last two reporting periods. The 45.81 million shares sold short still make up 4.4% of the stock's available float, and would take a little over two days to cover at its average daily pace of trading. 

Options traders are likely cheering today's pop, seeing as these investors have rarely been more bullish. In fact, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security sports a 50-day call/put volume ratio of 28.86, which stands higher than all other readings from the past 12 months. This means long calls are being picked up at their quickest clip in a year. 

Unsurprisingly, calls are flying off the shelves during today's trading. So far, 133,000 calls and 26,000 puts have been exchanged, which is 20 times the intraday average. The most popular position is the January 6.50 call, followed by the weekly 1/14 6.50-strike call. 

 

 

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