| 2012.05.23 |
The initial public offering of Facebook stock did not go as planned. Priced at $38 per share on Friday,
the stock saw a price as high as $45 before later falling below $31. News outlets reported that Facebook and
investment firms associated with the IPO may have jumped in to buy up shares to stem the flow of money
the stock was hemhorraging in the afternoon. (Morgan Stanley and other
underwriters reportedly made a profit of about $100M doing so.)
Now today, Wednesday, reports have surfaced that state the IPO is being investigated by the SEC, and
that lawsuits have been filed on both coasts, claiming that Morgan Stanley analysis suggesting the company was weaker
than predicted was only circulated among few preferred investors.
For his part, CEO Zuckerberg has been mum. On Tuesday he sold 30.2 million shares worth $1.13B — analysts
suggest he sold between 10% and 15% higher than the original price expectations. Both are probably wise moves.
Links:
"Zuckerberg, Morgan Stanley Sued Over Facebook IPO" (MSNBC.com)
"Facebook Stock Slumps Another 9 Percent" (MSNBC.com)
"Where are Facebook's friends? Stock Slide Deepens" (Bloomberg Businessweek)
"Morgan Stanley, Other Underwriters Make $100 Million Profit on Facebook IPO"
(Wall Street Journal)
"Facebook's Zuckerberg, Thiel Sell Shares" (CBS MarketWatch)
"Facebook Is Nothing But Embarrassment" (CBS MarketWatch)
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