New Media Stocks Dive as IPO for Maker of 'Candy Crush Saga' Fizzles
New-media stocks had a rough-going on Wednesday led by King Digital Entertainment, the company behind the hugely popular social game, Candy Crush Saga. The company set its initial public offering at $22.50 last night and its stock plunged 16 percent to $19 on its first day of trading on the New York Stock Exchange.
Zynga, the maker of Words With Friends and a rival of King Digital, saw its shares drop 4 percent to $4.64.
Despite some enthusiasm over Facebook's announcement this week that it acquired virtual-reality goggle maker Oculus for $2 billion, shares of the giant social network dropped 7 percent to $60.38 on Wednesday.
Shares of Twitter also dropped 7 percent on Wednesday, losing $3.45 and closing the trading day at $44.43.
Amazon.com and Apple fared a bit better, losing 3 percent and 1 percent, respectively, and Netflix bucked the losing trend entirely by rising fractionally.
Competitors Google and Yahoo were down 2 percent and 1 percent, respectively, while the tech-laden Nasdaq index lost 1.4 percent on Wednesday.
Theories as to why new-media shares took a dive Wednesday largely focused on the market's negative reaction to King Digital, which became the worst-received IPO so far this year. Investors selling shares of Facebook on the heels of its Oculus acquisition was also troublesome, some analysts said.