* Cites reports of trading glitches, oral disclosures
* Says it followed customary practice
* Market value has fallen by a quarter since trade debut
(Recasts, adds comments from motion)
By Basil Katz and Edwin Chan
NEW YORK/SAN FRANCISCO, June 15 (Reuters) - Facebook Inc
, facing a raft of lawsuits from investors seeking to
recoup losses from its botched IPO, laid out on Friday how
cascading Nasdaq trading glitches might have contributed to the
confusion surrounding its May 18 debut.
The No. 1 social network and lead underwriters Morgan
Stanley, Goldman Sachs Group Inc and JPMorgan
Chase & Co filed a motion requesting that dozens of
shareholder lawsuits over its $16 billion initial public
offering be grouped together in Manhattan federal court.
The filing, while standard in cases with multiple lawsuits,
hints at how Facebook may choose to structure its defense.
Nasdaq spokesman Joseph Christinat declined to comment.
More than a dozen shareholder lawsuits have accused Facebook
and its underwriters of hiding the company's weakened growth
forecasts ahead of the May 18 stock offering, one of the largest
IPOs in U.S. history.
Nasdaq OMX Group Inc has also been sued by
investors who claimed the exchange operator was negligent in
handling orders for Facebook shares.
Facebook's IPO was to have been the culmination of years of
breakneck growth for a social network that became a cultural and
business phenomenon. But shares in the eight-year-old company
founded by Mark Zuckerberg in his Harvard dorm room have shed
almost a quarter of their value, or $24 billion, since their
debut at $38 a share.
In the motion filed late Thursday, Facebook - which was the
first American company to debut with a market value of more than
$100 billion - defended its pre-IPO disclosures on mobile user
revenue growth. The motion cited reports that Facebook had told
underwriters about lowered revenue forecasts but not amended its
Plaintiffs "ignore that what Facebook and the underwriter
defendants allegedly did both followed customary practices and
did not violate any rules," according to the motion.
Facebook also cited a series of press reports which
described how trading errors compounded uncertainty on May 18,
after commencement of trading in its shares was delayed by about
half an hour.
The motion cited lawsuits "alleging that technical problems
and other trading-related errors affecting Facebook's stock -
which Nasdaq has subsequently admitted - created market
uncertainty and caused investor losses."
In court papers filed late on Thursday before the U.S.
Judicial Panel on Multi-District Litigation, Facebook and the
banks said the U.S. District Court in Manhattan was the "most
appropriate and convenient forum to oversee these coordinated
and/or consolidated proceedings."
In afternoon trading on Friday, the stock was up 2.2 percent
(Editing by Bernadette Baum)
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