Technology, Zynga | featured news

Investors appear to be souring on social networking shares, a development which bodes ill for the eventual IPOs for Facebook, Twitter and other players in the industry. Perhaps unnerved by the lackluster reception for Zynga shares, the sector took a pounding in Monday's trading.

Zynga Inc., the largest maker of games for Facebook, declined in its first day of trading after raising $1 billion in an initial public offering that gave it a greater valuation than rival Electronic Arts Inc. The shares, listed on the Nasdaq Stock Market under the symbol ZNGA, fell 5 percent to $9.50. The developer of games such as “CityVille,” “FarmVille” and “Mafia Wars” sold 100 million shares for $10 each, the top end of a proposed range.

Social games maker Zynga is preparing to set a final initial public offering price on Thursday, a day before it begins trading on the stock market, in what is shaping up to be the biggest U.S. Internet IPO since Google.

Zynga CEO Mark Pincus wants some of the online game company's early employees to give back stock they own ahead of the company's initial public offering of stock, according to a published report Thursday. The Wall Street Journal said that Pincus, who gave out stock freely to keep top talent early on, developed "giver's remorse."

Here, direct from the S-1, is the figure that matters more. Operating income in the most recent quarter declined year over year from $13.4 million to $13 million – not the big 95% drop reported in the news.

On Tuesday, PopCap games announced it was being acquired by Electronic Arts, confirming speculation that circled late last month. The deal is valued as high as $1.3 billion in cash and stocks. But the company reportedly also fielded a huge offer from social gaming giant Zynga.

Compared to Groupon, which has enormous administrative costs and is hemorrhaging a lot of money, Zynga is a ruthlessly-run, well-oiled machine.

Zynga Inc filed paperwork for an initial public offering on Friday, the latest in a series of hot social media companies to seek capital in the U.S. public markets.

Zynga is close to raising as much as $500 million from a group of investors in a round of financing that could value the maker of CityVille, FarmVille and other popular Facebook games as high as $10 billion.

Japanese social games company DeNA is out to take down American rivals Facebook and Zynga.