| <No.439> |
| US Regulators Looking at Leadup to Facebook IPO |
Facebook's much celebrated initial public offering made global news.
But some investors didn't see the mammoth social network as a money maker.
"Everyone I know does not buy anything off of Facebook on those little click ads on the side.
And, basically I always click them off, and I'm like, 'uninterested, uninterested, just get them off my computer.'"
Turns out, Facebook knew that.
More and more mobile device users were ignoring ads.
So, Facebook advised underwriters to lower forecasts.
Lead underwriter Morgan Stanley did, but allegedly only shared those revised estimates with some investors.
Jason Tanz is with the magazine Wired.
"If people with more power and money to invest got a different set of facts and information and analysis than the average retail investor, then yeah, that's troubling."
Troubling too, is a lawsuit against NASDAQ, the American stock exchange that handled Facebook's IPO.
Lead plaintiff Philip Goldberg claims investors like him lost money because NASDAQ delayed or mishandled their stock orders.
Goldberg owns his own business, which he works from here inside his condominium.
His attorneys won't allow him to speak on camera, but he described himself as a typical investor.
"The whole Facebook IPO has been a mess."
Patrick Carroll is the founder of Wealth Strategies Group, a financial consulting firm. He never recommended Facebook to his clients in the first place.
"I wouldn't be buying Facebook at any price at this point.
I would wait to see what happened going forward, coming out with the regulatory issues."
Facebook is not commenting.
And, Morgan Stanley says it followed the same procedures with Facebook as it does with all IPOs.
Carolyn Presutti, VOA News
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