Facebook Sued over the IPO by shareholders
Shareholders sued Facebook and the Owner Mark Zuckerberg over the Facebook’s IPO.Shareholders said that they hid bearish forecasts prior to going public.
The suit, filed Wednesday morning in the U.S. District Court in Manhattan by the Brian Roffe Profit Sharing Plan, Jacob Salzmann and Dannis Palkon, charges that Facebook and its lead underwriter concealed “a severe and pronounced reduction” in Facebook revenue growth forecasts before the company’s shares were offered to the public.
The complaints :
“The true facts at the time of the IPO were the Facebook was then experiencing a severe and pronounced reduction in revenue growth due to an increase of users of its Facebook app or website through mobile devices rather than a traditional PC such that the Company told the Underwriter Defendants to materially lower their revenue forecasts for 2012. And, defendants failed to disclose that during the roadshow conducted in connection with the IPO, certain of the Underwriter Defendants reduced their second quarter and full year 2012 performance estimates for Facebook, which revisions were material information which was not shared with all Facebook investors, but rather, was selectively disclosed by defendants to certain preferred investors and omitted from the Registration Statement and/or Prospectus.”