[jrosenblatt]

Sure, ZNGA went down 6% yesterday, to about the same price it was on Wednesday, which is still 15% more than it was a couple weeks earlier.

Not sure about Zynga as a company, but it's easy to overreact to the market's reaction to this news.

[travisp]

Even though this is Wired, this is typical of financial reporting: to take a single day of price movements and write whole stories about them, completely ignoring larger price movements or alternative explanations. I've even seen news articles about stock market movements changed after the price swung from negative to positive in the same day... but the article kept the explanation for the price movement essentially the same! My guess is that this Wired story would have found a way to be written regardless of what the stock price did. But, getting to say that it "dove 7%" makes for good headlines (even if soared 8% just the day before, meaning that it just "dove" back to its original price).

While I don't think Zynga is a great company to invest in, its stock price is very volatile, which probably makes for good frequent attention grabbing headlines. Sure, this news was part of the reason the stock price was down, but apparently market price setters still think the company is 13% more valuable than it was 30 days ago.

[hosay123]

One of the early innovations of Bloomberg was to totally automate certain classes of news story, driven entirely by data. As you can see from spending any length of time browsing Google Finance, the number of this class of stories in the present day is absolutely huge, from a wide variety of 'news' outlets.

"Top movers! Miners down 0.00001% as fears grow over $calendar->getNextECBAnnouncement()"

What's more terrifying is that Google Finance even syndicates these articles, and that people trade off of them - "informed" traders, buying and selling based on articles that are quite literally generated from sampling noise

[JumpCrisscross]

Do you have a reference for this? As someone with a Bloomberg terminal I've found their wire service completely free of that kind of junk more typical of tech journalism, MarketWatch, or StockTwits.

[hosay123]

Bloomberg mentions it in his autobiography (Bloomberg by Bloomberg) while Taleb mentions encountering similar stories on his Bloomberg terminal in Fooled by Randomness.

[rubyrescue]

I know a lot of Bloomberg reporters and a bureau chief for a pretty big market and they definitely do not work this way. For starters, the people relying on the terminals (and paying a lot of money for them) are savvier than that.

[hosay123]

> certain classes of

As commented below, Bloomberg mentions it in his autobiography.

[bdcravens]

A one-day stock price decrease isn't the news.

Zynga was in a very special place at a very special time. Social gaming had an amazing stretch of months, but that time seems to have passed, at least in terms of being on fire. Zynga's relationship with Facebook is really the only thing that set them apart. Innovative games? They took the same game and kept reskinning it. When that fizzled out, they began copying other games wholesale. (lol at a title of theirs I saw recently: "Scramble with Friends") They're not a gaming company, but did a pretty good job of looking like one and getting paid in the process.

However, going public was dumb. They should have piled up cash and kept it all to themselves. Going public is meant for companies that are capable of being in it for the long haul. Not for companies that have figured out how to be successful in an industry that didn't even exists two years prior.

Zynga can probably transition into other areas, like mobile games, online gambling, etc. However, they are just one of many in that space. They have no secret sauce or magic. They can probably turn a profit, but nothing that can bring their stock price back to where it was.

The only ones who care how Zynga does are the crazy ones that hold ZNGA. Otherwise, they're just another gaming company right? If you do hold ZNGA, well, that sucks. Not a "sad set of circumstances" suck. More like "I blew my money on a Vegas weekend" suck.

[xpose2000]

Well said.

As far as Facebook. This news is great. It gives confidence to investors that they don't need Zynga to do well in terms of revenue. (Although they should have already knew that).

[rm999]

I sort of agree with you, but Zynga is currently so dependent on Facebook that even small or expected news like this is major news for Zynga. I'd call a 6% drop fairly significant because investors already knew the relationship with facebook was souring and have probably priced a lot of it in.