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Zynga Flop Forces Tech IPOs to Reboot

Technology companies have been losing momentum with their IPOs.

Earlier this year, it seemed as if every technology company floating its initial public offering was virtually guaranteed success. But as Martha White writes for MSNBC's BottomLine, one company's stumble at the IPO starting line may not bode well for tech startups.

Zynga's share prices started dropping right out of the gate, going from $10 when its stock went public last week to $9 at the end of Monday's trading, she says. The glory days for tech companies started in May of this year, with LinkedIn's IPO, followed by the limited success of Pandora and more subdued debuts for Groupon and Angie's List.

Jim Krapfel, a Morningstar equity analyst, told the news outlet that the uncertainty surrounding the industry could linger into the new year, exacerbated by "largely unproven business models."

But Kevin Kelleher, a contributor for Fortune magazine, argues that Zynga's troubles may seem a lot worse than they actually are.

"Zynga faces risks that aren't fully reflected in their trading prices," he writes. "They will all be volatile, and because of that it doesn't make sense to write off a stock's long-term prospects based on two days of trading."