Printed from http://www.electronista.com

Facebook challenges IPO lawsuit merit, moves to consolidate

updated 05:50 pm EDT, Fri June 15, 2012

Claims NASDAQ technical issues to blame, not malfeasance

Social network leader Facebook has filed paperwork in New York courts to consolidate the more than 40 lawsuits focused on the company's initial stock public offering. Facebook and the banks supervising the IPO outlined their upcoming defense against the lawsuits--Nasdaq will be blamed for part of the botched first day of trading. Both the social network and the involved banks deny any wrongdoing, and claim that their actions were not out of the ordinary.

In the motion filed, Facebook defended its IPO roadshow disclosures on revenue growth from mobile devices. The company claims to have informed underwriters about lowered revenue forecasts, though the investor's prospectus was never amended to reflect the change prior to the IPO. The motion also claimed that "technical problems and other trading-related errors affecting Facebook's stock, which Nasdaq has subsequently admitted, created market uncertainty and caused investor losses."

Facebook shares have lost nearly 25 percent of their value since the $38 per share debut. The decrease in share price has shed $24 billion from the social network's net worth. Following the announcement of the consolidation and defense, Facebook stock rose over two percent to nearly $29.

The US Securities and Exchange Commission is investigating Morgan Stanley's disclosures during the IPO as well as the alleged NASDAQ technical problems during the first day of trading. Lawsuits in regards to the poorly handled IPO began about a week after the IPO. Leery of the complications, the Russian version of Facebook, VKontakte, is delaying its IPO.



By Electronista Staff
Post tools:

TAGS :

toggle

Comments

Login Here

Not a member of the MacNN forums? Register now for free.

toggle

Network Headlines

toggle

Most Popular

Sponsor

Recent Reviews

Sound Blaster Roar Bluetooth speaker

There could very well be a new king of the hill for Bluetooth speakers, with Sound Blaster's recent entry into the marketplace. Bringi ...

Kenu Airframe Plus

Simple, stylish and effective, the Kenu Airframe + portable car mount is the latest addition to Kenu's lineup. Released earlier this y ...

Plantronics Rig Surround 7.1 headset

Trying to capture the true soundscape of video games can be a daunting task. Looking to surround-sound home theater options, users hav ...

Sponsor

toggle

Most Commented

 
toggle

Popular News