As of today, Facebook (FB) shares have fallen roughly 18.4 percent from their $38 IPO price, within the first three days of trading, reducing the value of stock sold in the IPO by more than $2.9 billion.
It was announced that Facebook, Inc., Facebook Chief Executive Officer Mark Zuckerberg, and the banks, including Morgan Stanley, are being sued by shareholders, claiming the defendants hid Facebook's weakened growth forecasts ahead of its $16 billion initial public offering.
One lawsuit, was filed in U.S. District Court in Manhattan today, Wednesday, May 23, 2012, and another yesterday,Tuesday, May 22, 2012, in a California state court.
The New York complaint stated, "The value of Facebook common stock has declined substantially and plaintiffs and the class have sustained damages as a result."
Shareholders in the New York case said research analysts at several underwriters had lowered their business forecasts for Facebook during the IPO process. They said that these changes were "selectively disclosed by defendants to certain preferred investors" rather than to the general public.
The defendants were accused of allegedly 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.
"The value of Facebook common stock has declined substantially and plaintiffs and the class have sustained damages as a result," the complaint said.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, PLLC, has represented clients nationwide. If you or a family member have sustained investment losses due to your stock broker or financial advisor’s recommendations in Facebook (FB) stock, call for a free consultation on how to potentially recover your losses. To speak with an attorney call 888-760-6552, or visit our website at: https://www.securitieslawyer.com.
Soreide Law Group, PLLC., representing investors nationwide before FINRA the Financial Industry Regulatory Authority.
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