If we're talking Zynga, we can't forget about Facebook (FB). Facebook has been drawing its fair share of unwanted attention from its own post-IPO drama, and the verdict is the same: sell this stock.
Just like Zynga, Facebook dropped dramatically late last week, sliding close to 20% after the firm announced an in-line earnings report. Facebook's performance post-IPO has at least been consistent. Shares made their all-time high at the get-go, falling ever since with a series of higher lows.
While a reasonably strong support level had been set at $26 back in June, any buying pressure below that price got sapped on Friday when shares gapped down to test new lows in the low $22 range. For the exact same reasons as Zynga, Facebook's gap down is a signal to stay away from shares.Even worse, Facebook opted to take advantage of what they thought was good IPO sentiment by offering even more shares to the public. That means that FB has a much bigger float than other sell-worthy stocks like Zynga, a factor that could hike shorting (and thus increase selling pressure) in Facebook. I'd strongly recommend against going bargain-hunting in this stock. For another take on Facebook, it shows up on a list of 3 of Wall Street's Future $100 Stocks.
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