Facebook IPO Sends Tech Stocks Surging

25 minutes ago by Zoe Fox 

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Facebook filing for IPO Wednesday did good for more than just the social network. Companies associated — even tangentially — saw their stocks soar in trading Thursday.
As the largest Internet IPO to date, Facebook‘s plan to raise $5 billion lured investors to pour money into similar web companies.
Zynga did particularly well on the market Thursday, following a statement in Facebook’s S-1 saying the social game maker generates 12% of the company’s revenue. Zynga rose 16.84% in trading, finishing the day at $12.39 per share.
“We currently generate significant revenue as a result of our relationship with Zynga, and, if we are unable to successfully maintain this relationship, our financial results could be harmed,” read Facebook’s S-1.
Facebook takes a 30% cut of all virtual goods sold through Zynga games such as FarmVille and CityVille, which results in significant profits. Of Facebook’s $3.71 billion in sales in 2011, $445 million was generated by Zynga. While some investors had considered Zynga a risky investment due to its dependent relationship with Facebook, it became clear Wednesday that Facebook too is dependent on Zynga.
Despite no direct business relationship, professional social network LinkedIn saw a 6.37% increase in share values. Renren, often called China’s Facebook, saw shares rise 8.18%. The revenue generated by Facebook, as was detailed in the S-1, likely encouraged investors to buy stock in social networking companies.
Other Internet companies such as Groupon, Netflix and Pandora also saw their shares rise in trading Thursday.
Take a look through the gallery below to see the details of how Internet stocks fared Thursday. Do you think this is a good sign for Internet companies or could we be approaching another dot-com bubble burst? Sound off in the comments.

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