Well, this IPO mess is just getting worse for Facebook. It’s been announced today that the social networking site among others is being sued:
Facebook Inc. chief executive officer Mark Zuckerberg, and several banks led by Morgan Stanley were sued by shareholders, who claimed the defendants hid the social networking leader’s weakened growth forecasts ahead of its $16-billion initial public offering.
The defendants were accused of concealing from investors during the IPO marketing process “a severe and pronounced reduction” in Facebook revenue growth forecasts, resulting from increased use of its app or website through mobile devices.
Sucks to be Zuckerbeg et al. But there’s actually worse news:
On Wednesday a Democratic aide to the Senate Banking Committee told The Associated Press the panel wants to learn more about the initial public offering. The committee seeks briefings with representatives of Facebook, regulatory agencies and others. The aide spoke on condition of anonymity because the committee’s planned inquiry hasn’t been publicly announced.
If that’s true, this could quickly spiral downward.
Oh yeah, Facebook stock was shockingly up today closing at $32 which is up $1 from yesterday’s close.