Nasdaq halts short-selling
Zynga's stock price has taken its worst hit since the collapse following the failed Facebook IPO.
A report published by Cowan & Co analyst Doug Creutz described social games on facebook as in an "accelerating user tailspin" due to the growing competition from mobile devices.
"We believe that interest in Facebook-based gaming may have reached a negative inflection point," wrote Creutz, "as more casual gamers migrate to mobile platforms."
The resulting sell-off drove shares below $5 for the first time, hiting an all time low of $4.78 before bouncing back up to close at $4.98 - a daily decline of just over ten percent.
According to Reuters, the drop was so steep (11.8 percent at the daily low) that Nasdaq issued a tempory halt to short-selling for the first time since the Facebook launch.
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Zynga has lost more than half of its initial ten dollar valuation since launch, and is now almost two thirds below its first year target estimate.
Facebook games might not last forever.
Specially if so badly translated as games from Zynga are. Time to change the outsourcing partner?
I suppose we're finally seeing the burst of the Facebook Bubble.
We're not seeing the bursting of the Facebook bubble, only an analyst predicting it.
"I knew that i wanted to control my destiny, so I knew I needed revenues, right, fucking, now. Like I needed revenues now. So I funded the company myself but I did every horrible thing in the book to, just to get revenues right away. I mean we gave our users poker chips if they downloaded this zwinky toolbar which was like, I dont know, I downloaded it once and couldn’t get rid of it. *laughs* We did anything possible just to just get revenues so that we could grow and be a real business…" Marc Pincus
