On Friday, shares in social network Facebook dipped to $19 – exactly 50% of its IPO price just three months ago – before closing at $19.05, a one-day drop of just over 4%. The stock has lost 10% of its value in the two days since the expiration of the most recent lockup period freed up 271m more shares to potentially change hands. This most recent tumble is all the more troubling, coming as it does despite the heavy advance publicity surrounding the lockup expiration, as well as the fact that most market indices are nearing record highs for the year. The Wall Street Journal reported that CEO Mark Zuckerberg told staff that the company’s market slide has been “painful” to observe. No shit, given that Zuckerberg is Facebook’s largest shareholder, and the stock slide has resulted in a personal loss (on paper, at least) of over $400m for the Zuck in just the past three months.
The Daily Beast’s Alex Klein described Facebook’s problem thus: it’s “too big not to keep failing.” The company has been such a media sponge that it now absorbs any negative news surrounding social media, technology stocks, or IPOs in general. Has irrational exuberance given way to irrational despair? Perhaps Zuck & Co. can take heart from the news that technology giant Apple’s stock hit a new high ($644.13) on Friday. The accomplishment followed a four-month downturn sparked by the company posting its slowest growth in two years – just the second time in the past decade that Apple failed to satisfy analysts’ expectations. Then again, Apple actually makes products, so perhaps comparisons aren’t exactly appropriate.
Social game developers Zynga managed to avoid becoming collateral damage of Facebook’s slide, closing out Friday’s trading unchanged at $3, although that’s still 70% off Zynga’s IPO price. Meanwhile, as Zynga waits for the real-money gambling party to start, the company must rely on its Facebook revenues to keep the lights on. There are now 235m people playing games on Facebook each month, up from 205m at this point last year. AppData reported that Zynga’s Texas HoldEm Poker added 700k FB users this week, a 2% gain that brought its monthly average user total to 36.3m. To keep users interested in its chief moneymaker, Zynga has teamed with Chatwing to launch an interactive chat widget that can be installed on blogs and websites. Up to 1,000 Zynga players can now simultaneously share poker tips and while away the hours rubbishing other players’ abilities and quizzing each other on how long Zynga will be around.