Facebook And Banks Sued Over IPO

(Start Sarcasm) Because investing in internet companies has been so dependable in the past. Yes I have a Facebook presence, correction, I have a Facebook account. So I am the odd man out since I do not live on Facebook. Regardless, they think pretty highly of themselves at $16 Billion. Let’s blame them because the stock is falling. (End Sarcasm)

VIA – REUTERS: “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.

“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.

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Posted in Internet

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