Days after a law firm launched a class-action lawsuit on behalf of investors against Facebook and its bankers, alleging that certain investors were given preferential treatment, Facebook’s shares dipped during Tuesday’s trading to near $29, more than 20% under its IPO price. —ARK
The share sale has proved a disaster for Facebook and its bankers. US authorities are investigating allegations that the company gave critical information to some investors and not others. Shareholders have launched class action lawsuits against founder Mark Zuckerberg, the company and its bankers, including lead bank Morgan Stanley.
Walter Zimmermann, senior technical analyst at United-ICAP, said there was plenty of evidence that the stock could fall further. He said the share sale had represented “a mania of historic proportions”.