After Strong Opening, Zynga Shares Dip on Stock Market
Game-maker Zynga, famous across Facebook for its addictive time-sinks, floated its initial public offering on NASDAQ yesterday. It was a strong showing, with the company valued at some $8.9 billion in the largest IPO since Google’s 2004 outing. However, things quickly turned for the company, no doubt leaving some investors worried about the future.
With a strong valuation, Zynga’s stock began trading at $11 per share — a full dollar above it’s $10 per share valuation. It was an auspicious beginning, but apparently did not last long. Shares soon dipped below the $10 mark, and closed at $9 a share. That’s a nearly 10% drop in a single day.
While one bad say of trading might not mean a whole lot, the disappointing start is sure to feed into a larger suspicion of second-wave tech startup IPOs. Online coupon company Groupon, for instance, had an absolutely insane IPO and has been tumbling downward ever since. LinkedIn, a career-focused social network, has also failed to meet expectations since its IPO.
Zynga surely still has time to redeem itself, but trader’s love affair with new online companies might be coming to an end.