Totally unexpected for most, Zynga shares dropped 12.52% the day following its 2011 Q4 results were made public. Even if the company recorded growth across the board in major site indicators, it still recorded a net loss in the financial column.
On February 14th, before the aforementioned Q4 announcement, Zynga stock was flying high, up 7.61% from its opening price. Immediately after the press release hit the web, the stock started plummeting.
The disaster continued the following day, when Zynga share prices closed 12.52% lower than it's day opening value.
Analysts put it on a period of two weeks in which Zynga stock grew daily with no particular reason, mainly anticipating the Q4 announcement.
Because of normal operating costs as a public company, most analysts expected ordinary results in Zynga's first quarterly results after its IPO. Nevertheless, many still considered Zynga to have the potential of posting spectacular results, no matter what, mainly because of its constant growth during the last 2-3 years.
Since this didn't happen and Zynga came in just slightly better than everyone expected, the inflated stock soon corrected itself to the price it ranged in prior to the Q4 announcement.
Apparently many viewed the past two weeks as a last chance to get Zynga stock at a lower price, before it blows up. Sadly for them, this didn't happen.
But don't spend your time crying over Zynga's stock market loss. From a year earlier, total revenue rose 59%, a 5-cent-per-share adjusted profit was recorded, all while ad and booking revenues never stopped coming.
Traffic numbers are also up, Zynga recording a 13% growth of daily active users, a 23% growth of monthly active users and a 38% growth of monthly unique visitors.
Overall in 2011, Zynga recorded a $404 million loss, but most of it was because of a $510 million one-time expense, related to its IPO, which analysts expected and were aware of. So you could say that in a normal setting, Zynga would have came up $106 million in profit.
With Facebook's IPO coming up, Zynga stock may hit another gold rush, when anything Facebook-related is expected to grow wildly.