Shares in social gaming company Zynga, which Tech.li recently covered in an expose, are frozen after 13 percent declines. Heavy downside volume triggered Nasdaq’s so-called “circuit breakers,” which the exchange put in place after the Flash Crash of 2010.
Rolfe Winkler speculated:
$ZNGA collapsed when $FB opened. Off 13%. Maybe no one wants to own a $FB proxy now that they can own $FB??
Zynga’s social gaming business relies heavily on Facebook as a distribution network. Declines in Zynga shares could be a market reaction to Facebook’s initial 13% pop, or these declines could simply reflect investors’ decisions to dump a once-hot social tech stock in search of greener (or bluer) pastures.
As this is a developing story, we will update you when more news hits the wires.
Update: Trading in Zynga have resumed.