By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Tech stocks were set to end the
week on a negative note Friday, as big losses from social-gaming
company Zynga Inc. and online-travel site Expedia Inc. took center
stage.
Zynga (ZNGA) shares tumbled almost 18% to $2.88 after the
company reported a decline in its second-quarter sales and forecast
weaker-than-expected results for its third quarter.
New Chief Executive Don Mattrick, who was hired away from
Microsoft Corp. (MSFT) just three weeks ago, said Zynga was backing
away from plans to push into "real money gaming" in the U.S. and
would focus on free, social games. Mattrick added that he
anticipates "two to four quarters of volatility" as Zynga sorts out
its various issues and strategies.
Expedia (EXPE) was having an even worse day than Zynga, with its
stock price plunging more than 26% to $47.97.
Late Thursday, Expedia reported second-quarter results that
missed analysts' expectations, as earnings fell from the same
period a year ago. Expedia said its results were hampered by a 33%
rise in its sales and marketing costs, as well as strong
competition by rivals.
Led by Expedia, other online travel sites also retreated, with
Orbitz Worldwide Inc. (OWW) down by 4% and Priceline.com Inc.
(PCLN) shares falling by 2% to $891.89.
Other notable decliners included Netgear Inc. (NTGR), which fell
more than 9%, to $29.99 after the networking-equipment company on
Thursday gave a third-quarter outlook that missed analysts'
forecasts. Analysts at RBC Capital Markets cut Netgear's rating to
underperform, or sell, from sector perform.
Outerwall Inc. (OUTR), which recently changed its named from
Coinstar, fell by almost 13%, to $56.93 after the operator of
Redbox DVD rental kiosks gave a second-quarter report that missed
Wall Street's estimates and cut its outlook for its entire fiscal
year.
Losses also came from tech bellwethers Hewlett-Packard Co.
(HPQ), Netflix Inc. (NFLX), IBM Corp. (IBM), Netflix Inc. (NFLX),
Yahoo Inc. (YHOO) and Google Inc. (GOOG).
The few gainers included videogame publisher Activision Blizzard
Inc. (ATVI), which rose more than 13%, to $17.26. There were
reports that Activision is going to buy out Vivendi's controlling
stake in the company.
Amazon.com Inc. (AMZN) shares rose 10 cents to $303.49 after
reporting mixed quarterly results late Thursday.
The Nasdaq Composite Index (RIXF) fell 15 points to 3,590, and
the Philadelphia Semiconductor Index (SOX) gave up 1.2%.
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