Zynga stocks dive 10% after analyst report

Zynga stocks dive 10% after analyst report
Seth Tipps

By Seth Tipps

June 13th 2012 at 12:17AM

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.

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.