Zynga Inc (NASDAQ:ZNGA) shares have tanked from Q2, and sunk from a 2012 peak of $14.69 to around $2.80 today. The stock is trading at a 11.6 percent discount to the value of its assets, which is calculated at $3.17 per share. Zynga Inc (NASDAQ:ZNGA) witnessed a steep decline after it announced it would cut 18 percent of its workforce.


Zynga’s Biggest Problem: Mark Pincus

But analyst Mark Meadows sees an upside in the stock. He says Zynga Inc (NASDAQ:ZNGA)’s biggest problem is its CEO Mark Pincus. He is still the top boss of the social gamer only because he owns 50.15 percent of the voting shares. Zynga Inc (NASDAQ:ZNGA) needs a management shake up, which may be possible if Mark Pincus voluntarily decides to give up control of the company.

Meadows thinks it is possible that Pincus will give up his position. Zynga is the fourth company that Pincus founded. He has already sold the other three. Now he may split the roles of chairman and CEO, and hire an outsider to reposition the struggling social gaming giant. That will push the stock up just like Groupon Inc (NASDAQ:GRPN) which surged 30 percent after firing Andrew Mason.

Real Money Gaming

Another optimistic view is that Zynga Inc (NASDAQ:ZNGA) plans to shut down four more games during the second quarter. The company can focus on mobile and real money gaming, two fields with huge growth potential. Zynga Inc (NASDAQ:ZNGA) already has some of the most popular poker games in the United States. It has 36 million users on Facebook Inc (NASDAQ:FB), of which at least 6 million are active on any given day. Moreover, operating real-money gaming in the U.K. has given Zynga expertise in the niche.

Changes in online gaming policy by the government will give Zynga Inc (NASDAQ:ZNGA) a further boost. Las Vegas, Delaware and New Jersey have already made online gambling legal, and more states are expected to join them. Charles Cohen, the CEO of British gamer Probability Plc, says that soon more than 50 percent of U.S. citizens will live in a city where online gambling will be legalized. Zynga Inc (NASDAQ:ZNGA) will also put a large emphasis on mobile gaming.

Meadows says that the recent sell-off is a perfect opportunity to buy Zynga Inc (NASDAQ:ZNGA) given these potential catalysts. Zynga Inc. shares were up 1.58 percent to $2.88 at 10:10 AM EDT.