Trouble in Farmville: Zynga's Shares Sink on Opening Day [UPDATED]

by Techvibes NewsDesk

When LinkedIn went public, the markets went mad. The stock surged an incredible 150%. More recently, Groupon went public—and, despite a soured reputation, the company's share price managed to shoot up 50%. Even Pandora surged on day one.

Zynga, the last major tech IPO of the year, did not repeat this feat. In fact, the Farmville maker's share price actually sank on day one, from $10 to $9.50, and even further into the red during after-hours trading.

Of course, Zynga has only itself to blame: numerous experts, including Sterne Agee analyst Arvind Bhatia and Morningstar analyst David Summer, pegged an accurate share price for the company at between $6 to $7—as much as 40% less than the gaming startup opted to launch at.

Even aside from analysts' opinions, Zynga's numbers aren't exactly shining: growth has slowed considerably over the past year, profit margins are shrinking, and the company's extreme Facebook dependency has long been a worry for investors. Perhaps folks are finally getting wise to the bad idea of throwing money at company's whose numbers just don't add up.

UPDATE: Zynga's stock has dipped a further 5%, teetering below $9.

Toronto, Ontario, Canada

Zynga is the world’s largest social game developer. More than 215 million monthly active users play its games. Zynga’s games include FarmVille, Treasure Isle, Zynga Poker, Mafia Wars, YoVille, Café World, FishVille, PetVille and FrontierVille. Zynga games are available on Facebook, MySpace and the iPhone. Through, Zynga players have raised more than $3 million for world social causes.... more

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Techvibes NewsDesk

Techvibes NewsDesk

Techvibes is Canada's leading technology media property.Founded in 2002, Techvibes covers technology and business news that impacts Canadians. We combine breaking local news with international coverage to deliver a unique balance of insight and information. The Techvibes Newsdesk covers a broad beat and publishes general news stories. If you have a story you would like covered, email... more

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