Zynga’s (NASDAQ: ZNGA) IPO wallowed in the virtual mud of one of its virtual farms today as the stock closed down 5% below it’s offering price of $10.00 per share to close at $9.50. Talk about a fast depreciation schedule. Shares of the social gaming company fell as low as $9.00 intra-day. Of course it did not help matters that investors were dumping stocks from about the opening bell this morning. The S&P 500 opened high but sold off after 10 am. The selling reached a peak around 1 pm and the index bounced along the lows for the rest of the day.
With options expiring today it looks like the markets were uninterested in making any waves with the S&P 500 closing up 3.91 to 1219.66 and the Dow Jones Industrials closing essentially flat at 11866.39.
While the public was sold a near 11% stake in the company, CEO Mark Pincus holds a 37% voting stake compared to a 2% stake for the public. Friday’s result was considered to be a complete flop as IPO investors are usually sold the company at a discount. The only ones making money on this IPO were those that went short on the open where the stock traded at $11.50 briefly and fell within minutes under its IPO price.
This is the latest in a disastrous series of ‘internet’ IPO’s that should have a chilling effect on Facebook’s planned offering in 2012. I would suggest to Mark Zuckerberg et. al. that they treat their investors better than they’ve treated their customers recently.Previous Post » SEC Plays Hardball With Judge to Protect Citibank