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Zynga shares fall flat on Wall Street debut

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Zynga's FarmVille

Zynga's debut on Wall Street Friday is the largest from a U.S. company since Google went public in 2004 — and it has been one of the most widely anticipated stock offerings of the year.

But if early trading is any indication, anticipation doesn't translate into interest.

Though shares of the social games maker began trading at over $11 Friday (a 10 percent increase over the stock's IPO price), they almost instantly reversed course when wide trading began. By mid-afternoon, the company was down roughly 9 percent.

The thumping by investors on the company's first day as a public entity really shouldn't come a surprise, though. Before shares even began trading, one of the gaming industry's more notable analysts -- Sterne Agee's Arvind Bhatia -- initiated coverage with an "underperform" rating, citing the notable slowdown in the company's growth in recent months. Bhatia set his target price for the stock at $7.

[ Related: Zynga IPO Meets Cool Reception (Yahoo! Finance) ]

The pile-on continued with Cowen and Company giving the company a "neutral" rating, also citing a slowdown in growth and increasing expenses.

Discouraging notes from analysts aren't all that could have potential investors upset. Keep in mind that founder Mark Pincus really isn't giving investors any say in how the company proceeds. He holds 70 times more voting power than all of the common stock that went up for sale, something the company has tried to brush over in the walkup to the IPO.

And as if that weren't enough, the New York Times recently published a stinging report about employee morale at the company, noting worker frustration was on the rise due to long hours and stressful deadline periods.

Zynga priced its shares at the top end of its expected range at $10 per share, giving the company a $7 billion valuation, which is much lower than an independent company valued the company, but still higher than many publishers in the traditional gaming world, including Grand Theft Auto publisher Take-Two Interactive Software and Electronic Arts.

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