When you lose the lottery, you can’t blame anyone but yourself for taking a sucker’s bet. That’s not stopping those that took a Facebook flyer from blasting others for their own gamble. With shares off 16% from the initial price of $38, they’re saying it’s Nasdaq’s fault for botching the offering. They say it’s unfair that analysts at Morgan Stanley and Goldman Sachs cut their earnings estimates but only told big clients about it. Those issues are clearly significant. And regulators need to get to the bottom of what happened. But investors can’t claim they they were not warned about other potential pitfalls – which were well-telegraphed, and well-reported. First, there were Facebook’s first quarter results, which showed that revenue declined from the fourth quarter. ... Continue reading →

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With Facebook's stock plunging, Zynga suddenly finds itself in a socially awkward spot. It doesn't help that Facebook itself seems less bullish on the revenue potential for social-gaming companies.In a late April securities filing, Facebook cited an estimate that global sales of so-called virtual goods—something Zynga relies on for the bulk of its revenue—would rise to $15 billion by 2014. That would imply an average annual growth rate of about 19%. Two weeks later, it cited a new estimate that the number would be $14 billion by 2016, halving the growth rate to 9%. If the growth rate continues to slow, that would call into question Zynga's valuation. At $7.09, its shares trade 29% below their IPO price, yet Zynga still fetches a valuation of ... Continue reading →