Facebook and banks including Morgan Stanley are being sued by the social networking leader’s shareholders, who claim the defendants hid Facebook’s weakened growth forecasts ahead of its initial public offering (IPO).
The social network went public last week with an IPO that valued it at $104 billion (€82.7 billion).
Shares in the company have since fallen about 18 per cent from the IPO price of $38. The decline has reduced the value of stock sold in the flotation by more than $2.9 billion.
The defendants, who include Facebook chief executive Mark Zuckerberg, are accused of concealing from investors during the IPO marketing process “a severe and pronounced reduction” in revenue growth forecasts, resulting from increased use of its app or website through mobile devices.
The lawsuit was filed in a Manhattan district court yesterday. A day earlier, a similar lawsuit by a different investor was filed in California.
Representatives of Facebook and Morgan Stanley did not immediately respond to requests for comment. – (Reuters)
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