Sometime in the past few weeks a hacker calling himself Gnosticplayers hacked into Zynga’s Words with Friends database; the Words with Friends hack breached the personal data of more than 218 million Words with Friends players.
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.
As goes Facebook, so goes the world of social media – perhaps not the whole world of social media, but certainly those companies intricately intertwined with Facebook, like Zynga, the creator of popular (at least for now) Facebook games like “Farmville,” “Hidden Chronicles,” and “Mafia Wars.” Zynga shares have declined steadily over the last few months as fewer Facebook users play games through the social media platform. This week has been particularly unkind to Zynga, whose share price dropped 10 percent on Tuesday alone. What’s wrong with Zynga? Are Zynga shares not worth what they once were? Will Zynga shares continue to decline in value?