Facebook IPO gets lukewarm response

Social-media stocks tumble Friday after tepid response to Facebook IPO.
By PETER SVENSSON Published: May 19, 2012
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The lukewarm response to Facebook Inc.'s initial public offering sent shares of other social-media companies tumbling Friday.

The sell-off is a sign that Facebook is now a bellwether for the small sector, which is mainly composed of companies that have gone public in the last year. Facebook has a market capitalization more than 10 times larger than that of LinkedIn Corp., the closest equivalent already publicly traded.

One of the biggest losers was game-maker Zynga Inc., whose shares fell so fast that trading was halted soon after Facebook started trading.

When the halt lifted, Zynga's shares rebounded so fast that they prompted another halt. They finally resumed trading at 12:35 p.m. CDT, sinking to close at $7.16. That was down $1.11, or 13 percent, from the day before.

Shares of the San Francisco-based company hit a low for the day of $6.40, its lowest level since it went public in December priced at $10 a share.

Zynga makes FarmVille, CityVille and Mafia Wars, and gets the bulk of its revenue from Facebook users.

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