Zynga’s Stock Trading Near All-Time Low Despite Two New Games
Zynga’s stock was trading more than 3 percent lower today despite the launch of two new games over the past two days.
The company’s stock dipped below $9 a share, and by midday, shares had fallen 29 cents to $8.90, nearing its all-time low of $8.75 a share.
Just last month, the largest social games company successfully sold 100 million shares at $10 apiece to raise $1 billion. On its second day of trading, the company’s stock sank to what for now is its low before settling at $9.02 a share.
Since then, it has been trading fairly consistently, and there was no obvious explanation for today’s sell-off.
If anything the stock should be pushing higher on the release of its latest games. Typically, more games translates to more revenue for the company, which is focused on selling virtual goods in the free-to-play model.
This morning, Zynga announced its newest mobile game, a spinoff from its ultra-popular Words With Friends franchise. The game, called Scramble With Friends, challenges players to connect letters to spell as many words as possible before the clock runs out.
The game closely follows yesterday’s launch of Hidden Chronicles, which is the company’s first Facebook game in the popular “hidden objects” category, where players are challenged to find a number of items within a scattered and cluttered scene.
Still, Wall Street apparently isn’t impressed.
Based on intraday trading, the company’s market valuation dropped to $6.2 billion, about two-thirds of its IPO valuation of $10 billion.
Zynga isn’t the only stock market newbie trading lower today.
Groupon, the other hot Internet IPO of 2011, also sank. The company’s shares were down 90 cents, or almost 5 percent, to trade at $17.89.
Confidence in the stock was still reeling from two reports released this week. One surveyed merchants to find out how satisfied they were after running a deal. The other reported that revenues in November were weaker than expected across the entire daily deals industry.