Top Leaderboard, Site wide
Left Masthead
July 5, 2015
Truthdig: Drilling Beneath the Headlines
Sign up for Truthdig's Email NewsletterLike Truthdig on FacebookFollow Truthdig on TwitterSubscribe to Truthdig's RSS Feed

Get Truthdig's headlines in your inbox!


Transport-Sharing Boosts Health, Wealth and Climate




A God in Ruins

Truthdig Bazaar more items

 
Ear to the Ground
Print this item

Facebook Sued by Investors Over IPO

Posted on May 23, 2012
Wired Photostream (creative commons)

Facebook CEO Mark Zuckerberg, seen here at SXSW in 2008, was named in the lawsuit.

Facebook faced more bad news Wednesday in the wake of its botched initial public offering. Shareholders filed a lawsuit against the social networking company, lead underwriter Morgan Stanley and several other Wall Street banks, alleging that they misled them about Facebook’s revenue projections ahead of the IPO. JPMorgan Chase and Goldman Sachs were also named in the suit, which was filed in U.S. District Court in Manhattan.

Facebook shares closed up 3.2 percent at $32 on Wednesday, down nearly 16 percent from their IPO price of $38. —TEB

CNBC:

The legal action accused the defendants, including Facebook Chief Executive Mark Zuckerberg, of concealing “a severe and pronounced reduction” in revenue growth forecasts resulting from increased use of Facebook’s app or website through mobile devices.

Facebook was also accused in the lawsuit of telling its bank underwriters to “materially lower” forecasts for the company.

“The main underwriters in the middle of the road show reduced their estimates and didn’t tell everyone,” said Samuel Rudman, a partner at Robbins Geller Rudman & Dowd, which brought the lawsuit. “I don’t think any investor in Facebook wouldn’t have wanted to know that information.”

Andrew Noyes, a Facebook spokesman, said: “We believe the lawsuit is without merit and will defend ourselves vigorously.” 

Read more

 

More Below the Ad

Advertisement

Square, Site wide

New and Improved Comments

If you have trouble leaving a comment, review this help page. Still having problems? Let us know. If you find yourself moderated, take a moment to review our comment policy.

 
Right 1, Site wide - BlogAds Premium
 
Right Skyscraper, Site Wide
Right Internal Skyscraper, Site wide
Right 2, Site wide - Blogads
 
Join the Liberal Blog Advertising Network
 
 
 

Like Truthdig on Facebook