Zynga shares tumble to fresh low on Facebook fears
NEW YORK: Shares of the social media games maker Zynga plunged more than 10 per cent Tuesday after an analyst note highlighted concerns about the impact on the firm of a shift to mobile Internet.
Zynga, whose games are popular on Facebook, closed down 10.57 per cent at $4.98, the first close below $5 since it went public last year at $10.
A report by analysts at Cowen & Co. said Zynga may not get the revenues some people expect if Facebook users gravitate to mobile devices.
“We believe that mobile devices may be siphoning off an accelerating number of gamers from Facebook,” the report said.
“Facebook itself is increasingly being accessed by mobile devices, however it is not possible to play Facebook-native apps through Facebook on a smartphone.”
Zynga makes and operates the online games FarmVille, Mafia Wars, CityVille, Words With Friends and Zynga Poker, and gets most of its customers from Facebook.
Facebook shares rose 1.46 per cent to $27.40 but remain well below their offering price last month of $38.