UPDATE: Credit Suisse Initiates Zynga at Underperform on Pressure in Fundamentals

Credit Suisse initiated coverage on Zynga

with an Underperform rating and a $3 price target. Credit Suisse commented, "Our cohort-based analysis for Zynga's games for the last few years suggested progressively steeper user decay curves once a game is launched. This issue may be becoming more acute, with users apparently leaving even recent releases like The Ville once ChefVille and FarmVille 2 were launched. … With users now apparently migrating from new title to new title with lower stickiness for the older games, we now have to question whether Zynga will be able to cross sell third party games against the traffic it generates from its first party games. And if users are essentially jumping from game to game, the act of cross selling a third-party game (especially if it is a hit) will lower Zynga's operating profit dollars given the revenue share it will have to pay to the developer." Zynga closed at $2.35 on Wednesday.