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Monday October 20th 2014

Econophysicists say social gaming company Zynga is overvalued

It’s hard to believe but nobody has properly calculated how much a social gaming company should be worth. Until now.

Last November, a couple of econophysicists at the Swiss Federal Institute of Technology in Zurich took a close look at the share price of Facebook, the social networking company that is valued at anywhere between $65 billion and $100 billion.

That, they said, is crazy given the amount of money Facebook can reasonably squeeze out its 750 million users. They calculated that a more realistic valuation would be between $15 and $30 billion, based on Facebook being able to extract about $1 profit per user and under the assumption of modest growth in the next few years….This time, these guys ask whether the social gaming company Zynga is overvalued with a market capitalisation of around $8 billion.

Read more: Technology Review

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