Facebook IPO Nosedive Now Has Facebook IPO Class Action Lawsuit
Not even a week, and Facebook's IPO is in trouble. There's been more reports and suspicious activity, though not necessary illegal, from Facebook's bank advisors in the lead up to the company's IPO last week. Investors who got the early dibs are trying to get their money back through the courts.
Morgan Stanley, Facebook's IPO underwriter was encouraging its client to up its initial price offering while at the same time cutting estimates for its future financial success. They managed to let out the last bit of info to the ears of giant institutional clients while managing to keep it obscured from the normal investor. As you can guess, everyone else is pissed.
As Business Insider reports, shareholders have filed a class action suit against Facebook and Morgan Stanley claiming that the company's prospectus contained false information. Adding to Facebook's woes: The case will be handled by Robbins Geller, the same firm that took down Enron for $7 billion.
It's too to tell but lets see how this pans out in the weeks to come.