Is This Zynga Inc (ZNGA)’s J.C. Penney Company, Inc. (JCP) Moment?

Early last month, I <a Target Corporation (NYSE:TGT)=”_blank” href=”http://www.fool.com/investing/general/2013/06/05/is-this-the-beginning-of-the-end-for-zynga.aspx?source=iptimolnk0000001″>was tough on Zynga Inc (NASDAQ:ZNGA) after the company issued a press release outlining how it would close various office locations and lay off 520 employees, or around 18% of its workforce. At the same time, Zynga Inc (NASDAQ:ZNGA) also issued worse-than-expected second-quarter guidance, forecasting a loss between $36.5 million and $26.5 million on terrible bookings of $180 million to $190 million.

To be sure, Zynga Inc (NASDAQ:ZNGA)’s stock had just plunged 11% over the previous two trading days on the news, prompting some investors to wonder whether it was a good time to pick up shares on the cheap.

Even so, I remained convinced the drop was merited, especially considering Zynga Inc (NASDAQ:ZNGA)’s bookings last quarter also fell 30% year-over-year to only $229.8 million, while revenue fell 18% over the same period to $261.3 million.

Sure enough, shares of Zynga Inc (NASDAQ:ZNGA) fell by another 10% over the next few weeks as analysts continued to downgrade the stock, before rebounding slightly with the broader market last week.

Out with the old… sort of
Then, on Monday afternoon, shares of Zynga Inc (NASDAQ:ZNGA) popped 10% after it announced its much-maligned CEO, Marc Pincus, would step down as Zynga gave the top job to Don Mattrick, who for the previous six years had worked at Microsoft Corporation (NASDAQ:MSFT), which included three years as president of its interactive entertainment business. There, Mattrick helped grow the Xbox 360’s global installed base by sevenfold to more than 75 million consoles.

Before that, Mattrick had served as the president of Worldwide Studios at Electronic Arts Inc. (NASDAQ:EA), where he had worked since 1991 when EA acquired the software company he founded at the age of 17.

Meanwhile, Pincus — who our very own Motley Fool community happened to name the “Worst CEO of the Year” in 2012 — will remain chairman of Zynga’s board, at the same time serving as the company’s chief product officer.

Who better than Don Mattrick, then, to turn around Zynga’s struggling business, right? Naturally, the ensuing optimism has pushed shares of Zynga up a whopping 23% from Monday’s open to Wednesday’s close.

Ron Johnson all over again?
Unfortunately, I have to agree with fellow Fool Alex Dumortier, who asserted Monday that Zynga’s pop is nothing more than a triumph of hope over reason considering the stock still looks too expensive to make such a long-term bet with respect to the yet-to-be-determined size of its addressable market.