Fury Over Facebook IPO Grows, Lawsuits Mount

Wednesday, 23 May 2012 10:29 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Facebook Inc and banks including Morgan Stanley were sued by the social networking leader's shareholders, who claimed the defendants hid Facebook's weakened growth forecasts ahead of its $16 billion initial public offering.

The defendants, who also include Facebook Chief Executive Officer Mark Zuckerberg, were accused of concealing from investors during the IPO marketing process "a severe and pronounced reduction" in revenue growth forecasts, resulting from increased use of its app or website through mobile devices. Facebook went public last week.

The lawsuit was filed in U.S. District Court in Manhattan on Wednesday, according to a law firm for the plaintiffs. A day earlier, a similar lawsuit by a different investor was filed in a California state court, according to a law firm involved in that case.

In the New York case, shareholders said research analysts at several underwriters had lowered their business forecasts for Facebook during the IPO process, but that these changes were "selectively disclosed by defendants to certain preferred investors" rather than to the public generally.

"The value of Facebook common stock has declined substantially and plaintiffs and the class have sustained damages as a result," the complaint said.

Representatives of Facebook and Morgan Stanley did not immediately respond to requests for comment.

Facebook shares fell 18.4 percent from their $38 IPO price in the first three days of trading, reducing the value of stock sold in the IPO by more than $2.9 billion.

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Sierra Leone Activist: We Need World's Help to Stop Ebola

Tuesday, 21 Oct 2014 18:23 PM

A peace organizer in Sierra Leone who gained worldwide attention for his work with survivors of a civil war says Sierra  . . .

FBI: Denver Girls May Have Tried to Join Jihadis

Tuesday, 21 Oct 2014 17:46 PM

The FBI said Tuesday that it's investigating the possibility that three girls from the Denver area tried to travel to Sy . . .

Rep. Gohmert: New Ebola Travel Rules Leave Americans 'Exposed'

Tuesday, 21 Oct 2014 17:32 PM

Rep. Louis Gohmert says new travel restrictions on people coming into the United States from the three west African coun . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved