In the upside down world of good news is bad news, bad news is good news, this is actually a bullish event although on the surface people are interpreting it negatively. There is no surer way to hurt equity prices than by creating more supply. Wall Street might not be good for much these days but they are great at floating stock when they smell the slightest opportunity. If the Zynga IPO had stuck, greedy bankers would rush out as many overpriced deals as they could. Now they will hesitate on adding more supply to a weak market and this will help stabilize the market.
By SHAYNDI RAICE And RANDALL SMITH
After weeks of anticipation and buzz, social game maker Zynga’s initial public offering quickly soured Friday, with shares dropping into negative territory. Rex Crum reports on digits. Photo: Getty Images.
Zynga Inc. bombed on its first day of trading Friday, closing down 5% in a signal that the appetite for new issues of fast-growing technology companies may be waning.
The San Francisco social-game maker’s shares finished trading at $9.50, a day after the company priced its initial public offering at $10 a share. Zynga opened at about $11 a share on the Nasdaq Stock Market, but fell below its IPO price within the first 10 minutes of trading.