Facebook reports earnings on Thursday for the first time ever as a public company. And in the wake of Zynga's numbers, the Fast pros are not optimistic.
After the bell Zynga shares plunged more than 30% after the video game maker missed esimates and slashed its 2012 earnings outlook.
“Zynga blamed the weakness on a more challenging environment on Facebook,” explains trader Jon Najarian, co-founder OptionMonster.com. “Not good. That doesn’t bode well for FB.”
Not only do the results suggest that traffic on Facebook may be slowing, but Zynga's results may hit the bottom line directly. Facebook relies on Zynga for 15 percent of its revenue, according to Reuters.
Trader Brian Kelly, founder of Shelter Harbor Capital, isn't nearly as bearish on FB as Najarian. On the decline he’s a buyer – however, as a long term investment.
“If you think Mark Zuckerberg is the next Steve Jobs – and I think he might be – I’d buy FB right here,” he says. “But then put away the shares for 30 years.”
If however, you're a trader looking for upside, Kelly says, "just stay away."
And if you're looking for other trades, Najarian suggests putting GLU Mobile on the radar. “This may be a sign that Zynga rivals such asGLUU are winning market share,” he says. “They may be doing better at Zynga’s expense.”
Posted by CNBC's Lee Brodie
Read More from Fast Money:
> Simple Strategies Behind Supersized Successes
> 10 Top Stocks for the Long-Term Investor
> Top Apple Related Stocks for 2012
______________________________________________________
Got something to to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to fastmoney@cnbc.com.
CNBC.com with wires.
Trader disclosure: On July 25, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Tim Seymour is long BAC; Tim Seymour is long INTC; Tim Seymour is long SBUX; Tim Seymour is long MSFT; Tim Seymour is long CAT; Brian Kelly is long GLD; Brian Kelly is long XLU; Brian Kelly is long TLT; Brian Kelly is long INTC; Brian Kelly is long IBM; Brian Kelly is long T; Brian Kelly is long VZ; Brian Kelly is long CAT; Brian Kelly is long USG; Brian Kelly is long XHB; Jon Najarian is long AAPL; Jon Najarian is long JPM; Jon Najarian is long T; Jon Najarian is long V; Jon Najarian is long MA; Jon Najarian is long BA; Jon Najarian is long BRCM; Jon Najarian is long CME; Jon Najarian is long CBOE; Jon Najarian is long GLUU; Jon Najarian is long CIGX; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Guy Adami is long AGU
For Greg Smith
Sterne, Agee & Leach, Inc. makes a market in the following subject company V
Sterne, Agee & Leach, Inc.'s research analysts receive compensation that is based upon various factors, including Sterne, Agee & Leach, Inc.'s total revenues, a portion of which is generated by investment banking activities.
Sterne Agee & Leach, Inc. expects to receive or intends to seek compensation for investment banking services from the subject company and/or companies in the next three months: V
