The tech and business press called it the most hyped initial public offering since Google, but very quickly today Zynga's public debut went sour with its stock price falling below its initial price of $10.
Zynga, if you don't know, is the company responsible for a bunch of social games like "Words with Friends," "FarmVille" and "Mafia Wars." Bloomberg reports that Zynga sold 100 million shares for $10 each, but by midday those shares were down 4.2 percent to $9.58.
USA Today reports:
"Zynga's performance could be a significant marker for an oft-times balky tech IPO market. LinkedIn's IPO earlier this year was successful, but shares of discount-deals site Groupon and Internet radio service Pandora sputtered after the companies went public.
"Groupon, whose IPO raised $805 million last month, closed its first day of trading valued at $16.5 billion, later dipped to about $10 billion, but has since rebounded. Friday, shares were trading around $22, slightly above the $20 IPO price.
"In a possible foreshadowing of Zynga's IPO, online gaming firm Nexon went public Wednesday on the Japanese stock market, raising about $1.2 billion, but had a lukewarm first day of trading."
Robert Hof at Forbes tries to find out what went wrong. One thing, he notes, is that Zynga is essentially an entertainment company open to the whims of taste, but he also offers a reality check.
"Let's not forget that Zynga's IPO is the biggest since Google's in 2004, and that it raised $1 billion for the company," writes Hof. "That's a huge cushion and moat against the competition. If Zynga CEO Mark Pincus can keep his company on track, a disappointing IPO pop will mean precisely nothing in the long term."
Update at 4:54 p.m. ET. Zynga stocked ended the day at $9.50, or 5 percent off from its initial price.
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