- Colorado gun crackdown law found to be built on faulty data
- Hank Aaron steps to fundraising plate for Democrat Michelle Nunn
- ISIL terrorists blow up burial site of Jonah, vow more of same
- Impeach Obama, say 35 percent in new poll
- Taliban yank 14 Shiites off bus, bind and shoot them on Afghan road
- Obama takes aim at ‘corporate deserters’
- Dick’s Sporting Goods lays off 478 PGA golf pros
- Senators: Cease-fire must allow Israel to defend against rockets, tunnels
- Sierra Leone doctor fighting Ebola catches disease
- Iraq welcomes Russian fighter jets, helicopter gunships into ISIL fight
‘Farmville’ maker’s stock lukewarm in public debut
Question of the Day
NEW YORK (AP) - Zynga’s stock got a lukewarm reception in its public debut Friday.
The online game developer’s stock fell 36 cents, or nearly 4 percent, to $9.64 in midday trading, though earlier it traded slightly higher. It was by no means the eye-popping jump that’s been the norm for freshly public Internet darlings such as Groupon Inc. and LinkedIn Corp.
“We didn’t have any expectations coming into this whole process,” he said in an interview. “We decided to go public a long time ago.”
Zynga Inc., which specializes in Facebook games, raised $1 billion in its initial public offering of stock. That makes it the largest Internet-related IPO since Google Inc. went public in 2004 and raised $1.4 billion. Pincus rang the Nasdaq’s opening bell in San Francisco, a first in the city for a freshly public company.
The company’s roughly 1,700 San Francisco employees woke up at the crack of down to celebrate with cinnamon buns and hot cocoa. Zynga also delivered video of the opening ceremony over the Internet to its offices around the world.
Zynga’s $10-per-share IPO price was at the top of its expected range, a sign that investors were eager to dig into the latest in a series of high-profile technology IPOs this year. It values the company at about $7 billion.
Online deals site Groupon, which began trading in early November, has a market capitalization twice that of Zynga‘s, $14 billion. But Zynga is selling a much bigger chunk of its available shares, 14.3 percent compared with Groupon’s 5.5 percent. It’s an issue of supply and demand _ selling more shares means investors don’t have to scramble to get their hands on them.
Zynga charges small amounts of money _ a few cents, sometimes a couple of dollars _ for virtual items in online games. The games are free to play. Players can acquire items that range from crops in “Farmville” to buildings in “CityVille,” its most popular Facebook game.
With its huge player base and a few loyal spenders, Zynga earned a net income of $90.6 million in 2010, an unusual pre-IPO money-maker in the sector.
Cowen & Co. analyst Doug Creutz, however, initiated coverage Friday with a “Neutral” rating on the stock. Although Zynga is the leader in Facebook gaming, he’s concerned that it won’t be able to grow fast enough to justify its stock price. Growth in Facebook gaming has slowed, and Zynga’s market share has declined from 50 percent to 38 percent of daily active users, he wrote.
He’s also concerned that Zynga’s famously aggressive and hard-charging culture may not be the best field to grow good games in. Others have raised concerns that the focus on deadlines and profits might be squeezing out creativity and talent.
AP Technology Writer Peter Svensson contributed to this report.
TWT Video Picks
Second- and third-stringers eye 2016 if front-runner stumbles
- 'We're coming for you, Barack Obama': Top U.S. official discloses threat from ISIL terrorists
- Obama orders Pentagon advisers to Ukraine
- NAPOLITANO: What if our democracy is a fraud?
- Michelle Obama says money in politics is bad, asks donors for 'big, fat check'
- PRUDEN: The Democratic-wannabe mice under Hillary Clinton's feet
- Hamas rejects Kerry's call for cease-fire; Fears grow others could join fight against Israel
- Presidents of Honduras, Guatemala blame U.S. for border children crisis
- Evidence shows Russia firing artillery into Ukraine: Pentagon
- Norway expects imminent 'concrete threat' from ISIL terrorists 'within days'
- Obama takes aim at 'corporate deserters'
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world
Fighting in Iraq