Zynga shares drop 10%
Social gaming giant trading below $5 for first time after analyst report paints declining picture of Facebook gaming; NASDAQ temporarily halts short sales of stock.
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Zynga shares plummeted more than 10 percent in trading today, with Reuters reporting that the NASDAQ stock exchange has temporarily prohibited investors from short selling the stock, effectively betting on its continued decline.
The Farmville developer closed today's trading at $4.98, down from yesterday's close of $5.55. Zynga had its IPO late last year, with its stock initially trading at $10 per share. It topped out at $15.91 in late February, but has since been trending downward.
Today's declines were attributed to an investor report from Cowen & Co. in which analyst Doug Kreutz said the market for Facebook games was in an accelerating user tailspin. NASDAQ also stopped trading in Zynga last month, after the disappointing Facebook IPO had investors indiscriminately dumping shares in multiple social media companies.