>"So a lot of Zynga shareholders were merely holding Zynga as a proxy for Facebook. Once Facebook was offered all those people decided to sell Zynga to buy Facebook. And Zynga tanked accordingly"
If people were holding ZNGA as a proxy for FB, with the intention to dump the shares for FB when it went public, then these people should have known that others would be doing the same. Thus, they should have started earlier. I think this theory explains the flash crash, but not the bigger picture.
>" The reason Facebook went down is the usual immediate post IPO sell-off when a bunch of people that got into the IPO sell their shares immediately to make some quick profit."
A stock transaction is a two-way street. There is a buyer on the other end of the deal, you don't sell shares into a vacuum. So, selling the shares doesn't drive down price, lack of demand does.
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>"So a lot of Zynga shareholders were merely holding Zynga as a proxy for Facebook. Once Facebook was offered all those people decided to sell Zynga to buy Facebook. And Zynga tanked accordingly"
If people were holding ZNGA as a proxy for FB, with the intention to dump the shares for FB when it went public, then these people should have known that others would be doing the same. Thus, they should have started earlier. I think this theory explains the flash crash, but not the bigger picture.
>" The reason Facebook went down is the usual immediate post IPO sell-off when a bunch of people that got into the IPO sell their shares immediately to make some quick profit."
A stock transaction is a two-way street. There is a buyer on the other end of the deal, you don't sell shares into a vacuum. So, selling the shares doesn't drive down price, lack of demand does.