Things are not looking good for Zynga, the developer of popular Facebook games like Farmville, Mafia Wars, and Hidden Chronicles. At the close of the market yesterday, the value of Zynga stock had decreased by more than a third, to $3.18 a share, which likely led to a devaluation of Facebook stock, down eight percent after late trading yesterday. Zynga is doing no better today: at the close of the market, the value of Zynga is hovering around $3.17 a share. Shortly after the Zynga IPO that took place last December, Zynga stock was worth nearly four times as much.
To anyone who follows technology in particular or business in general, it has become clear that the Facebook IPO (Initial Public Offering) was, to put it lightly, a major disappointment. The Facebook IPO was supposed to be a financial victory that fit neatly into the timeline (no pun intended) of one of the most successful technology companies in history. But since going public, the value of Facebook shares (and by extension, of course, the value of Facebook as a company) have plummeted. This is not how things were supposed to go. But Facebook is young and the company has plenty of time to recover, so we wanted to cut through the negative press about the IPO to examine where Facebook shares are potentially going and where they have been. Basically, what is Facebook worth, and just as importantly, what should Facebook be worth?
The Facebook IPO will be the IPO (Initial Public Offering) to end all IPOs, or at least that’s what you would think based on the hype surrounding it, and now May 17 is the day on which it is scheduled to occur, according to dozens of news sources. Over-hyped or not, the Facebook IPO is definitely a big deal – it very well could be the biggest Internet IPO in history, although this depends on what Facebook is worth (or what it is perceived to be worth by investors on the day the company’s stock goes on sale). Regardless, it will almost certainly make several Facebook employees, especially founder Mark Zuckerberg, very, very rich. It will also be constantly speculated about before the IPO happens, and endlessly discussed thereafter. Now is as good a time as any to join the chorus.