One month after its botched initial public offering, the social network is set to file a motion to consolidate all the shareholder lawsuits against the company, according to a person with knowledge of the matter, who requested anonymity because the document was still private.
The steep drop in the company’s share price has triggered questions over its lofty Initial public offering pricing.
The filing also points out the Nasdaq exchanges shortcomings in the Initial public offering process, highlighting technical problems and other trading related errors affecting Facebook’s stock – which NASDAQ has subsequently admitted – created market uncertainty and caused investor losses.
The company said in an SEC filing last month itslosses from Nasdaq’s mishandling of the Facebook Initial public offering rangedbetween $30 million and $35 million.
If youll recall, after Facebooks rocky first day of trading much of the attention was shifted to the last minute amendments to its S 1 filing, specifically the May 9th update where Facebook further emphasized its weakness on its mobile platform, an area in which the company struggles to find an effective monetization strategy.
As the motion says, Plaintiffs rely heavily on post Initial public offering articles as sources for their allegations a reference to the deluge of stories that followed the lackluster Initial public offering focused specifically on the May 9th amendment butthey ignore that what Facebook and the Underwriter Defendants allegedly did both followed customary practices and did not violate any rules.
Christiane Ruston is a business journalist based in Barcelona, Spain. Christiane has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Christiane spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.