Social media stocks mixed amid market downturn

AP News
Posted: Jul 23, 2012 1:37 PM
Social media stocks mixed amid market downturn

NEW YORK (AP) — Zynga Inc. rose and Facebook Inc. was down just a bit Monday, despite a widespread stock market decline, a signal that investors may be betting on solid, or at least acceptable, results when the two Internet companies report financial results this week.

Shares of Zynga, which have been clobbered in recent months amid worries about the online game maker's ability to keep growing and attracting new players, added 32 cents, or 6.7 percent, to $5.12 in midday trading. Still, the stock has lost nearly half of its value since the beginning of the year. The San Francisco-based company reports its second-quarter earnings on Wednesday.

Shares of Facebook, which reports its first quarterly results as a public company on Thursday, declined 28 cents, or 1 percent, to $28.48. That's nearly $10 below the social media company's $38 initial public offering price. The stock has not hit $38 since its first day of trading on May 18.

Investors are keen to see Facebook's results because it's the first report since the company's disappointing initial public stock offering in May. Wedbush analyst Michael Pachter expects Facebook to at least meet, if not exceed Wall Street's expectations.

Meanwhile, broader markets fell sharply on worries about a worsening European government debt crisis and a global economic slowdown. The Standard & Poor's 500 index fell 1.3 percent, while the more technology-focused Nasdaq composite index plunged 1.7 percent.

Stocks of other Internet stocks fell. A widespread economic downturn could hurt Internet companies that rely on advertising for revenue if businesses cut back their online ad budgets. Facebook counts some of the world's top brands as its biggest advertisers.

Shares of professional networking company LinkedIn Corp. dropped $2.56, or 2.4 percent, to $103.70. The stock has traded in the range of $55.98 and $120.63 in the past 52 weeks.

Groupon slid 13 cents, or 1.7 percent, to $7.27. The online deals site's stock has traded between $7.02 and $31.14 since its November IPO.