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Zynga stock falls following game launches

Fri 06 Jan 2012 8:45am GMT / 3:45am EST / 12:45am PST
BusinessPublishing

Two game launches in two days sends Zynga stock tumbling

The share price of social giant Zynga suffered another drop following the second game launch since it went public last month.

When the NASDAQ closed yesterday Zynga shares were trading at $8.91 each - slightly up from the day's low of $8.85, but significantly lower than its opening price of $9.19.

After the launch of two games in two days - Hidden Chronicles on Facebook, and Scramble With Friends on mobile - a drop in share price is unexpected, and casts further doubt on Zynga's IPO valuation.

When Zynga went public in December its shares were priced at $10 each, but dropped as low as $8.75 in the first week of trading. Since then, the company's share price has remained consistent, reaching a high of $9.75 on December 27.

To read Rob Fahey's editorial on Zynga's post-IPO performance, click here.

3 Comments

in addition, 2011 was a awful year for IPOs overall. Something to mull on when Facebook eventually musters its mega IPO

[link url=http://www.delawareonline.com/usatoday/article/52170080
]http://www.delawareonline.com/usatoday/a...[/link]

"•Rising number of broken deals. Investors shudder when an IPO's stock price falls below its offering price. But such broken deals were more common in 2011 than since 2008. Zynga, the online game company, was the most recent example. Shares of the company have fallen 5% from their initial $10.

More than half, 62%, of all IPOs this year are trading below their offering prices, and 70% are trading below their first-day close, a USA TODAY analysis of IPOscoop.com data found. Just 33% and 39% of deals broke in 2010 and 2009."

Posted:2 years ago

#1

Chuan L Game Designer / Indie Developer

22 0 0.0
You'd have to be quite stupid to think that Zynga or any of these IPO's were going to be "value for money". These companies only go public when past their prime, and folks like Goldman come in and inflate their market value to the chumps who don't have enough direct information to make a good call.

It might have made cents a year or two ago -- but now look at where we're headed with media convergence and the entertainment eco -system. In the best case, we have more diversity and opportunities for smaller developers dealing directly w/ players through this infrastructure. Worst case being what's happening with the Apple appstore where there's no good way to discover content, and developers are reliant on branding, publishers and marketing spend to push their content in front of the audience.

I don't think Zynga or necessarily even Facebook will be around in 5 years time, apart from a footnote in time. The simple fact is that it's difficult to anticipate what's going to have traction, and companies which have lost their agility and ability to innovate are just not worth supporting.


-- Chuan


Posted:2 years ago

#2

Chuan L Game Designer / Indie Developer

22 0 0.0
Furthermore, these recent tech IPO's like Groupon et al are just re -packaging already existing services or experiences under a catchy name and attempting to bank on that. It's really just buying into goodwill and the promise of eyeballs, though we've seen how that can work -- as with how people churned from MySpace for Bandcamp. These companies have little or no prospect for growth and seem to just cannibalise already existing ideas. A last gasp before the realisation of recession hits.


-- Chuan



Ps. To whoever is siteadmin, might do well to fix the submission address for
"comment_edit.php". At the moment editing comments is impossible.


Posted:2 years ago

#3

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