Facebook IPO Failure

facebook_shares_down1Facebook IPO scandals continue. Banks – co-organizers of the IPO (Goldman Sachs and JP Morgan) allowed short sell operations for their customers, which also affected Facebook shares fall, reported The Wall Street Journal (WSJ).

They played not only against the Facebook shares investors, but also against the leading underwriter of the IPO – Morgan Stanley, which tried to hold Facebook shares price on the first day of the IPO. Private investors began to take revenge on the social network, without waiting for court decisions: on Friday, someone flooded the article about Facebook in Wikipedia with pornographic images.

Let’s remind that Facebook IPO took place on May 18 with complications on NASDAQ, and Facebook shares quotes started to fall down after the first day of trading. The Friday’s quote is as follows: 31.91$ – 16% lower than the initial offering price.

On the first day of the trading about a quarter of the total amount of transactions – 580 million shares were sold in the short sales operations. Last Monday, this proportion dropped to 16%, but on Tuesday once again jumped to 20%, and on Wednesday reached already 36%. Facebook IPO underwriters banks has no comments about it.

The more details about the Facebook’s initial public offering becomes known, the more investors unhappy, who purchased shares of the company. Previously, investors have already started lawsuit against Morgan Stanley, Facebook and Mark Zuckerberg, accusing them of concealing important information about the business prospects of Facebook and demanded for compensation.

Dmitry Oreshko
Tags: ,

Relevant articles

Report of Goldman Sachs About Facebook Commerce
In this report Goldman Sachs says that social media doesn’t have much influence upon online shopping...
Warren Buffett said: I will not buy Facebook shares
81 year old billionaire Warren Buffett said that he is not going to buy shares in Facebook but also...
Facebook IPO
As reported by the business newspaper The Wall Street Journal, social network Facebook will have an IPO...
Will Facebook Employees Sell $1 Billion In Shares?
It was lately reported that an institutional investor suggested Facebook $1 billion in exchange for employees’...