>So a lot of Zynga shareholders were merely holding Zynga as a proxy for Facebook.
This might be a part of the reason. But the big huge fall, then the huge rise might just be triggered by silly trading algorithms, maybe?
Like you said, Zynga and Facebook are presumed to be highly correlated in terms of value. But, Zynga needs facebook more than the other way round. I think (and this may just be utterly wrong), that the steep fall in facebook's value triggered an even steeper fall in Zynga's share price, which then cascaded to panicked investors selling their shares to lower it even more.
The real funny thing however, is the steep rise again. I am tempted to venture a guess that everyone was watching the trades to see who would make the first move, and then piggyback on them.
Sort of like a room full of people with guns pointed at each other. No one really wants to make the first move, but as soon as someone does, the only chance of surviving would be to start shooting.
Comments
>So a lot of Zynga shareholders were merely holding Zynga as a proxy for Facebook.
This might be a part of the reason. But the big huge fall, then the huge rise might just be triggered by silly trading algorithms, maybe?
Like you said, Zynga and Facebook are presumed to be highly correlated in terms of value. But, Zynga needs facebook more than the other way round. I think (and this may just be utterly wrong), that the steep fall in facebook's value triggered an even steeper fall in Zynga's share price, which then cascaded to panicked investors selling their shares to lower it even more.
The real funny thing however, is the steep rise again. I am tempted to venture a guess that everyone was watching the trades to see who would make the first move, and then piggyback on them.
Sort of like a room full of people with guns pointed at each other. No one really wants to make the first move, but as soon as someone does, the only chance of surviving would be to start shooting.