Shares for online gaming company Zynga (ZNGA) popped just over 2 percent on Friday to $3.42 after a major revamp to the company’s website now allows users to log in for gaming without having to use Facebook (FB) as an intermediary.
The move is seen as a significant step towards independence for the company. Gamers can still access the site through Facebook if they wish, but the new interface provides the opportunity for players to create avatars that are not tied to the name on their social media accounts.
Zynga’s initial public offering on Dec. 16, 2011 saw shares priced at $10, and though there has been much anticipation surrounding the future and prospects of the company, the results have been more or less disappointing. After reaching a high of $14.69 a little over a year ago on March 2, 2012, share prices have plummeted, hovering between $2 and $3 since August.
The move is a significant one considering that Zynga was at an early stage reaping about 90 percent of its revenue from its association with the social media giant, while at one point Facebook was getting 15 percent of its revenue from Zynga’s game offerings.
This began to change with increasing competition from other game companies, and more importantly, the increasing popularity of mobile and tablet devices with all of the free or cheap apps that these offer.
The stock’s promising open comes in spite of the fact the CLSA has downgraded it to “underperform”, with a price target of $3.50.