Zynga stock drops significantly following a negative article published by one Cowen & Co. analyst.
Stock in casual games company Zynga dropped as much as 13 percent to $5 yesterday, prompting NASDAQ to apply a 24 hour ban on short sales of the company's shares.
The operator of the NASDAQ stock market alerted traders that stock in Zynga hit a short sale breaker, an SEC rule that is triggered when stocks drop more than 10 percent from the closing price of the day before.
The drop is believed to be related to a report published by an analyst at Cowen & Co. which described the market for Facebook games has hit a "negative inflation point" while emphasizing the interest in mobile gaming in comparison.
Cowen and Co.'s analyst Doug Creutz stated the number of daily active users of Zynga's Facebook games declined eight percent in May, adding this was the second consecutive month-to-month drop with "nearly all of the company's major titles declining significantly."
Zynga went public last year for $1 billion and became the largest tech-based IPO since Google's 2004 public launch.