Facebook IPO draws lawsuits


The anticipation over Facebook's May 18 IPO quickly nosedived into dissatisfaction, judging by the multiple class action lawsuits the social-networking company now faces.

The suits allege that Facebook provided false and misleading statements in documents filed with the Securities Exchange Commission and made available to the public prior to the stock offering. In addition, according to the lawsuits, the company allegedly gave a private heads-up to lead underwriters, including Morgan Stanley and Goldman Sachs, who then decreased their revenue projections. The lawsuits allege that the underwriters told a handful of select investors about the change, but not the public.

The class action suits, two of which were filed in San Mateo Superior Court, call for compensatory damages. Case management conferences have been scheduled for July 25 and Oct. 4.

Facebook's stock continued to decline as news of the lawsuits circulated. By Friday, May 25, the price had dropped to $31.75 per share, after opening on May 18 at $42.05 on NASDAQ.

— Sandy Brundage


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Posted by Clark
a resident of University South
on May 29, 2012 at 5:02 pm

I used FB less and less these days and so do my friends. I looked at it about once a week and have NEVER bought anything from the site. I don't even look at the ads. It was fun for the first year but it doesn't hold my interest anymore.

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Posted by member
a resident of Barron Park
on May 29, 2012 at 5:10 pm

Facebook itself is irrelevant. This is going to have long term ill effects on the tech industry and Silicon Valley.

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Posted by Anon.
a resident of Crescent Park
on May 29, 2012 at 8:56 pm

Funny, most of the people into this idiotic financial play though they were going to rip off everyone else and get fabulously wealthy, like the Dot.Com boom. It didn't work out that way and now they want to cry about it. Facebook is so overly simplistic - do nothing - useless - data collecting website why anyone would pay a penny for the stock is beyond me.

Not to mention the rip off of the whole patent system protection of the most stupid obvious ideas - like the trash can, or the little boxes that pop up over stuff when you most over them. There are things that anyone would think of and need to have the freedom of doing. All of this is just a setup for everything continually being owned and controlled by the same people with the same bad intentions.

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Posted by For Real
a resident of Crescent Park
on May 29, 2012 at 10:40 pm

FB's disappointing IPO is a wake up call for overly-hyped start up companies. Be realistic.....

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Posted by C
a resident of Barron Park
on May 30, 2012 at 8:38 am

These class action lawsuits are waiting no matter how the stock goes. These firms are just market parasites.

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Posted by neighbor
a resident of Another Palo Alto neighborhood
on May 30, 2012 at 1:08 pm

I'm concerned about my privacy and copyright rights so I am not on Facebook. Oh, the horror! Not a hipster!
Well, maybe this is another and who knows where all your personal contact will end up. I wonder about firms with young people who are quick to install luxury offices with slides and all that. Facebook "must" do more -- all I can see is invasions of privacy, "slip-ups" (oops!), very targeted advertising, and who knows what else.

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Posted by c-z
a resident of Barron Park
on May 30, 2012 at 11:20 pm

This will be a real downer for Palo Alto.
That real estate price POP will turn instead to a bubble POP instead. The recent over bidders will get cautious again - and just when things were picking up again for the first time in years!

And its a real downer for all the social start-ups wanting to IPO or be bought up.

Its a disaster.

They were just way to greedy. If they IPO at 20 billion not a 100 billion they would be soaring by now!

This company is all about reputation. It has to be hip or people wont use it. And now they blew it. No reputation, no company.

It takes about 5 minutes to open a Google plus acct.

Sorry, but further commenting on this topic has been closed.

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