Facebook's IPO Filing Pushes Zynga's Stock Prices Higher and Higher
The Facebook IPO filing has been on investors' lips and in Facebook's user-investors' hearts this week. One does not necessarily include the other because many users don't yet own stock or may not understand the buying savvy involved when an IPO is launched.
The opening date arrives with the inevitable pop that stays for a bit, and then the doldrums follow for the long haul, especially in the case of media hyped up stock openings like Google's, which Facebook is often compared to with regard to the palpable excitement shared by many and especially the initial employees who stand to make millions of dollars.
In the paperwork and discussions it came out how important game developer Zynga whose Words With Friends, (the game Alec Baldwin refused to stop playing; this got him ejected from an American Airlines flight.) and others have rocketed Facebook's earnings. The filing revealed that Zynga accounted for 12% of Facebook’s 2011 revenue. Can one infer that Facebook's profits and Zynga's profits are interdependent?
Perhaps they are, and that is what investors have thought especially after the PR incident with Alec Baldwin highlighted his addiction to the game and the obvious obsession to it that the other 13 + million players have. After the incident which occurred just before Zynga's IPO, Michael Pachter, an analyst at Wedbush Securities said that the publicity of Baldwin's addiction was "phenomenal for Zynga" because "the average portfolio manager doesn't relate to their games and this helps to change their perception."
The buzz for Zynga's stock has been growing since the incident in December and the announcement for Facebook's IPO gyrated Zynga's stock price upward. According to Charles Schwab Discount Brokerage Services, for Thursday, the stock had closed at 12.385. Friday, Zynga opened at 12.97 in New York. It soared to its high at 14.44 and then pulled back to 13.39. Indeed, the paperwork filing has made a difference to Zynga’s market cap which climbed over $1 billion thanks to the increase in stock prices for Zynga.Continued on the next page