Trading of Zynga shares was halted this morning after the company's stock experienced a 13 percent decline following the weaker-than-expected Facebook IPO.
Trading of Zynga shares was halted this morning after the company's stock experienced a 14 percent decline following the weaker-than-expected Facebook IPO.
Zynga shares opened at $8.47 this morning, but began to plummet after Facebook's shares flatlined following its arrival on NASDAQ. After falling to $7.17, trading of Zynga shares was halted. Once the freeze expired, prices began to increase again, until a second halt was enacted. Once live again, prices began to sink as low as $6.93 before rallying slightly, closing at $7.16 at the end of the trading day.
The panic is almost certainly a result of Zynga's perceived intertwined fate with Facebook's platform, Morningstar analyst James Krapfel told Marketwatch.
"It's not too surprising that Facebook's less than spectacular debut is having negative secondary effects on social media companies such as Zynga," Krapfel said. "We believe a certain amount of premium was built into the shares of companies such as Zynga, Groupon, and Yelp due to the anticipated success of a Facebook IPO. Now that the catalyst failed to materialize, shares are taking a hit."
We've reached out to Zynga for a comment.