Shareholders sue Facebook
The consequences from Facebook messy IPO (initial public offering) have widened even more as shareholders have sued the social network amid massive loss on the shares.
The Nasdaq stock exchange also came under further pressure as its rival NYSE Euronext is said to have launched discussions with Facebook about a potential stock listing there. Also Nasdaq faces litigation from angry investors.
Facebook’s listing came with a big fuss that has now turned into a legal and public relations fiasco for the company and its lead underwriter – Morgan Stanley.
Facebook shares closed at $32 on Wednesday, 15% below the IPO price, reports Reuters.
As reported, top US regulators are probing whether Facebook underwriter – the investment bank Morgan Stanley selectively informed clients of an analyst’s negative report shortly before the stock started trading.
When the stock started trading on Friday, May 18, Facebook share price jumped several dollars, but quickly dropped back to $38.
Ref: 18.104.22.1688Resources: Shareholders sue Facebook
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