Facebook IPO Kicks Zynga’s Stocks In The Teeth
I may have spoken too soon. I speculated that we may see apps and Facebook developers being affected by the Facebook IPO soon, but not this soon.
Business Insider reports that as trading began on Facebook, Zynga’s shares drove off a cliff. The stocks plummeted by 13 percent. This wasn’t a stunt show where Zynga was going to jump out of the car at the last minute and float back up to the top. They hit rock bottom and the car exploded.
Thankfully, Zynga was able to grab onto something at the last minute. The shares were halted as it reached a low of $7.17 per share after being at $8.10 just moments before. The shares have picked back up to $7.80 a share, but that’s still a five percent reduction from where it was at this morning when trading began.
Business Insider attributes the drop in Zynga’s stock to the weak opening of the Facebook IPO. Set to trade at $38 per share, Facebook opened this morning at $42 per share. That quickly shot back down to $38 per share, but it’s slowly making its way back up.
This could be the reason why Zynga has started moving its games over to its own platform. Being so closely tied to Facebook has already proven to be a problem for the company’s performance.
We’ve reached out to Zynga for comment and we’ll update this story if we hear back. It will be interesting to see what their take on the matter is.