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Shares in Zynga's Wall Street debut may have started strong today, but minutes after they began trading, the stock's pricing chart looked like something that even the most extreme skier would have avoided.

By the time all was said and done, the company was down 5 percent, closing at $9.50 per share (and was down as much as 10 percent at one point during the day), bucking the trend of the year's other hot internet stocks, like LinkedIn and Groupon -- despite the fact that Zynga is profitable, while those companies are not. What went wrong?

There are plenty of culprits to blame, actually.

Read the entire article here.

they can call this game Stockville.

There are several other reasons as well...

Just to name a couple, the "float" i.e. number of shares/percentage of shares offered for sale was proportionally very low. This scares away institutional investors, because even if they wanted to invest a nice chunk in this company, they can't. ANd further, can't ever have a say in how the company operates once Zynga has their money (no board members). It makes people ask why.

Also, there were reports of some shenanigans in press before the IPO, where company management was trying to get certain original employees to give back their stock options or a portion of them. While this is "illegal" and it may not have gone through, ultimately, it speaks a lot about the "business sense" of senior management, or the lack of it. Again, something that does not inspire confidence in investors.

And finally, there is the feeling in the game community that farmville was something of anomaly, i.e. it was "lightning in a bottle", a great success but unlikely to be repeated. Even if farmville isn't copied by other game makers, the chances of another hit as big as farmville coming right after is not likely.

Frankly, I would not invest in this company, either.

$10 a share for this company? Are these people fucking mad?

I guess investors in the real world were leery about the long-term cash flow from e-farms run by housewives.

Told y'all to short this bitch.

They got lucky with Farmville, and that can never be repeated. Facebook is going to make for DAMN sure nothing like that happens again without them making most of the money.

Zynga's Share Price (still) Heads South

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There's a quiet lesson to be learned in childhood adventures involving dish soap and water: the bigger you blow your bubbles, the more likely they are to pop. Prior to Zynga's first appearance on the Nasdaq market on Friday 15 December, analysts suggested that its curiously high share price was a sign of a 90's-dotcom-esque bubble incident in the making. While the long-term truth of that remains to be seen, one thing is certain: Zynga's shares have lost 10% of their value over two consecutive days.

Access the entire article here.

In some ways, these "small" game companies are like start-up biotech/pharmaceutical companies: everything they have is tied up in one product. If it hits, they get bought, if not they go under.

And worse for game/MMO companies, their products lose appeal much faster than a useful on patent drug.

Usually, pharma companies that are not bought up by one of the big players have a few products it sells (over time) or they make a bunch of "generic" drugs, which are off patent, low risk, low profit. However most small drug companies try to bring one new drug to market, fail, and go under, often because of the expense. Those making it to IPO are relatively few.

Just like MMO/game companies.