|Zuckerberg, Goldman Sachs and JP Morgan.....|
|What could have gone Wrong?|
OK, Its Just four days into the "public Facebook" era and already, tantrums are being thrown from and at different quarters. Mark Zuckerberg Billions may have increased Post IPO, but he may soon be shedding some of that cash if the lawsuits filed against Facebook and some of its major Underwriters are anything to go by. We know he is no stranger to lawsuits given the Saverin and Winklevoss cases. The lawsuit claimed that the defendants, including Facebook Chief Executive Mark Zuckerberg, Goldman Sachs Group Inc and JPMorgan Chase & Co, concealed "a severe and pronounced reduction" in revenue growth forecasts resulting from greater use of Facebook's app or website through mobile devices.
(But didnt they know that Facebook mobile platforms generates little or nothing in terms of revenue>....smh). It also accused Facebook of telling its bank underwriters to "materially lower" their forecasts for the company. The lawsuit said the underwriters disclosed the lowered forecasts to "preferred" investors only, instead of all investors. However, Facebook were quick to release a statement. Andrew Noyes, a Facebook spokesman, said: "We believe the lawsuit is without merit and will defend ourselves vigorously." Morgan Stanley however had no comment. It said on Tuesday that Facebook IPO procedures complied with all applicable regulations and were the same as in any initial offering.
The Nasdaq exchange has admitted flaws with the IPO on May 18.
The lawsuit was filed in U.S. District Court in Manhattan. It asks for compensatory damages and other remedies. For more on this and other related issues read full story Here, here and Hia*.