Glancy Binkow & Goldberg LLP Files Class Action Lawsuit on Behalf of Investors against Facebook, Inc. & the Underwriters of t...
May 22 2012 - 7:50PM
Business Wire
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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