Facebook slammed with IPO-related lawsuit
New Delhi: A shareholder has sued the CEO of the largest social networking website’s initial public offering and seeks to claim damage and hold its directors and officers responsible.
Gaye Jones alleges that Mark Zuckerberg's Facebook failed to disclose weaker revenue trends and that users visited the website more using cellular devices. He exclaimed that the information was shared on a selective basis and that too with the company’s IPO underwrites and key investors.
Jones’ lawsuit seeks to force directors to expel the money they made from the botched IPO which they allegedly knew was overpriced.
"The defendants were unjustly enriched because they realized enormous profits and financial benefits from the IPO, despite knowing that reduced revenue and earnings forecasts for the company had not been publicly disclosed to investors," said the complaint.
Facebook's shares in the highly awaited IPO slumped from the initial price of USD 38 to about USD 25 within a month. The stock closed on Monday at USD 27.72 on Nasdaq.
With Agency Inputs