Declines From Zynga Inc Class A (ZNGA) Drive Down Internet Industry

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Zynga Inc Class A ( ZNGA) pushed the Internet industry lower today making it today's featured Internet laggard. The industry as a whole closed the day down 0.3%. By the end of trading, Zynga Inc Class A fell 9 cents (-2.9%) to $3.07 on light volume. Throughout the day, 22.5 million shares of Zynga Inc Class A exchanged hands as compared to its average daily volume of 34.4 million shares. The stock ranged in price between $3.05-$3.24 after having opened the day at $3.20 as compared to the previous trading day's close of $3.16. Other companies within the Internet industry that declined today were: Remark Media ( MARK), down 7.5%, SouFun Holdings ( SFUN), down 6.9%, Groupon ( GRPN), down 5.7%, and Jiayuan.com International Ltd ADR ( DATE), down 4.5%.
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Zynga Inc. develops, markets, and operates online social games as live services on the Internet, social networking sites, and mobile platforms in the United States and internationally. Zynga Inc Class A has a market cap of $2.01 billion and is part of the technology sector. Shares are up 33.9% year to date as of the close of trading on Monday. Currently there are two analysts that rate Zynga Inc Class A a buy, two analysts rate it a sell, and 13 rate it a hold.

TheStreet Ratings rates Zynga Inc Class A as a sell. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and generally disappointing historical performance in the stock itself.

On the positive front, LiveDeal ( LIVE), up 6.5%, ChinaCache International Holdings ( CCIH), up 4.7%, Phoenix New Media ( FENG), up 4.5%, and Tucows ( TCX), up 4%, were all gainers within the internet industry with Yahoo ( YHOO) being today's featured internet industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the internet industry could consider First Trust Dow Jones Internet Idx ( FDN) while those bearish on the internet industry could consider ProShares Ultra Short Technology ( REW).

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