SOURCE: Paragon Financial Limited

Paragon Financial Limited

June 13, 2012 08:20 ET

Social Media Industry Struggles -- Facebook Audience Growth Slows

The Paragon Report Provides Stock Research on Facebook and Zynga

NEW YORK, NY--(Marketwire - Jun 13, 2012) - The recent Facebook IPO was supposed to be a boom for the Social Media Industry, instead valuations of the five major social media stocks have fallen by over 25 percent. "After Facebook, investors will be gun-shy about dealing with these stocks," Singular Research's Robert Maltbie explained. "People will think of the business model, not the buzz." The Paragon Report examines investing opportunities in the Social Media Industry and provides equity research on Facebook Inc. (NASDAQ: FB) and Zynga Inc. (NASDAQ: ZNGA).

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The day of Facebook's IPO the 5 major companies in the industry -- Facebook ($82 billion), LinkedIn Inc. ($10.2 billion), Groupon Inc. ($7.45 billion), Zynga Inc. ($5.2 billion), and Yelp Inc. ($1.14 billion) -- had a total valuation of approximately $106 billion according to data from FactSet Research. Three weeks after the offering total valuations have dropped over 25 percent to 77 billion, with Facebook suffering the biggest loss dropping to $56.3 billion. "They see Facebook going down and they're depressed," Wedbush analyst Michael Pachter said of investors.

Paragon Report releases regular market updates on the Social Media Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous stock reports and industry newsletters.

Shares of Facebook have fallen nearly 30 percent since its IPO. According to numbers from ComScore Inc. Facebook's audience growth rose only 5 percent in April from a year earlier, significantly lower than the 24 percent increase in April of 2011. The slowdown in growth is to be "expected given Facebook's current size and market penetration," said Andrew Lipsman, a vice president of industry analysis at ComScore.

Zynga is a provider of social game services with 240 million average monthly active users over 175 countries. The company develops, markets and operates online social games as live services played over the Internet and on social networking sites and mobile platforms. Shares of the company have fallen over 25 percent in the last month. The company's lock up agreement ended on May 28, 2012.

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