Wednesday, May 23, 2012 7:40:52 AM
Glancy Binkow & Goldberg LLP, a Los Angeles based law firm with offices in New York and San Francisco, announces that it has filed a class action lawsuit on behalf of investors who suffered losses in connection with the highly publicized initial public offering (“IPO”) of Facebook, Inc. (“Facebook” or the “Company”) (Nasdaq:FB). In the IPO, Facebook sold more than 420 million shares of the Company’s common stock to the public at a price of $38.00 per share, of which approximately 180 million shares were sold by the Company and approximately 240 million shares were sold by existing stockholders. As a result of the IPO, Facebook received net proceeds of approximately $6.7 billion and the selling stockholders received approximately $9 billion.
The Complaint, captioned Lazar v. Facebook, Inc., et al., was filed today in the Superior Court for the State of California, County of San Mateo, on behalf of a class consisting of all persons or entities who purchased the securities of Facebook pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with the Company's IPO (including investors who purchased shares through May 22, 2012). The Complaint alleges, among others, that the offering materials provided to potential investors were negligently prepared and failed to disclose material information about Facebook’s business, operations and prospects, in violation of federal securities laws. A copy of the Complaint is available from the court or from Glancy Binkow & Goldberg LLP. Please contact us by phone to discuss this action or to obtain a copy of the Complaint at (310) 201-9150 or Toll Free at (888) 773-9224, by email at shareholders@glancylaw.com, or visit our website at http://www.glancylaw.com.
Specifically, the Complaint alleges that Facebook, certain of the Company’s executive officers and directors and the underwriters of the IPO failed to disclose that during the IPO roadshow, the lead underwriters, including Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, and Goldman, Sachs & Co., cut their earnings forecasts and that news of the estimate cut was passed on only to a handful of large investor clients, not to the public.
On May 22, 2012, Daily Ticker published an article titled “Facebook Bankers Secretly Cut Facebook's Revenue Estimates in Middle of IPO Roadshow,” which in relevant part disclosed that “Facebook’s lead underwriters, Morgan Stanley, JP Morgan, and Goldman Sachs all cut their earnings forecasts for the Company in the middle of the IPO roadshow.” Moreover, the article disclosed that “news of the estimate cut was passed on only to a handful of big investor clients, not everyone else who was considering an investment in Facebook.” The article concluded that, “during the marketing of the Facebook IPO, investors who did not hear about these underwriter estimate cuts were placed at a meaningful and unfair information disadvantage.” By the close of trading on May 22, 2012, shares of the Company’s stock declined to $31.00 per share, a commutative loss of $7.00 per share from the IPO price of $38.00 per share, in only three days of trading.
Institutional and individual investors that purchased Facebook’s shares who wish to discuss this action or their rights or interests with respect to these matters, are welcome to contact Michael Goldberg, Esquire, of Glancy Binkow & Goldberg LLP, 1925 Century Park East, Suite 2100, Los Angeles, California 90067, by telephone at (310) 201-9150 or Toll Free at (888) 773-9224, by e-mail to shareholders@glancylaw.com, or visit our website at http://www.glancylaw.com.
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