Shareholders sue Facebook
It had to happen sooner or later.
After just four days of trading, angry Facebook investors have brought out the lawyers, targeting Facebook’s bosses, main IPO underwriters Morgan Stanley, and others involved in the float.
According to the Financial Times, the suit alleges that Facebook and its banking syndicate disclosed revisions to their forecasts to ‘certain preferred investors’, leaving others in the dark about the updated predictions.
The allegations follow similar claims in the press, and could turn into a class action suit if other investors jump on board.
Facebook has signalled its intention to defend the case, saying the lawsuit is ‘without merit’. Morgan Stanley hasn’t responded, but has previously said it followed the same procedures it follows for all IPOs.
In a separate case, other investors have also challenged the operators of the Nasdaq exchange, saying the technical glitch which delayed the start of trading for half an hour on Friday represented negligence on behalf of the company.
Shares in Facebook rose in yesterday’s trading, from $31 to $32.