Zynga Gains From Facebook’s IPO
The impending Facebook IPO is positively affecting Zynga’s (NASDAQ:ZNGA) stock prices. Zynga’s IPO original stock price of $10 made gains at times today of about 14 percent. Zynga makes up 12 percent of Facebook’s revenue.
Before Zynga’s IPO, Facebook contributed 94 percent of the social-gaming company’s revenue and in the third quarter of last year, Zynga said Facebook accounted for 81 percent of its accounts receivable.
“Zynga is overly dependent on the Facebook platform,” Sterne Agee analyst Arvind Bhatia said. “A slowdown or disruption in the growth of Facebook, or Facebook policy changes will negatively impact Zynga.”
Zynga agrees completely, saying, “Any deterioration in our relationship with Facebook would harm our business and adversely affect the value of our Class A common stock.”
Here’s how Zynga’s shares are reacting to the news:
Zynga, Inc. (NASDAQ:ZNGA): ZNGA shares recently traded at $10.60, down $1.61, or 13.19%.
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