The Buzz

All markets and investing news all the time

Farmville fatigue? Zynga's stock drops below $5

June 12, 2012: 3:59 PM ET


It seems like quite a few Internet users are letting their virtual gardens grow weeds this harvest season.

Zynga's (ZNGA) stock hit an all-time low Tuesday and dipped below $5 for the first time, as investors grew concerned about Farmville fatigue.

The sell-off of more than 10% was triggered by an analyst report outlining how Zynga's games, including FarmVille and CastleVille, are losing their active user base. The sharp drop also forced Nasdaq to issue a so-called "short sale-related circuit breaker," meaning that investors won't be able to bet on a drop in its share price until Thursday.

The online gaming company known for creating addictive games has seen an 8.2% decline of its active users, the second straight monthly drop, according to a research note from Cowen & Co. Gamers are clearly learning how to break the Zynga addiction.

Zynga's stock price has been slashed nearly in half from its closing price of $9.50 on the day of its December 16, 2011 initial public offering. And it's down 67% from its highs in March.

Since Facebook's (FB) bungled initial public offering, Zynga, which largely offers its games through the social network, has watched its shares fall in tandem with Facebook's. But as of Tuesday afternoon, Zynga's stock has now actually done worse than Facebook following the IPO.

It may be way too early to call a bottom for Facebook. But unlike Zynga, Facebook is at least not posting drops day in and day out.

Posted in: , ,
Fear & Greed
Sponsored by

To view my watchlist

Not a member yet?

Sign up now for a free account
Stupid Stock Move of the Day
#StupidStock Move of the Day! $SPLS up 8% on analyst report about $ODP M&A chatter? Three wrongs ($ODP owns OfficeMax) don't make a right.
Powered by WordPress.com VIP.
Follow

Get every new post delivered to your Inbox.

Join 232 other followers