Facebook IPO comes under increased scrutiny
Though Facebook‘s shares gained on Wednesday, its initial public offering has come under Congressional probes and mounting lawsuits.
Facebook shares on Wednesday rose 3.2 per cent, to close at $32, still 16 per cent lower than its IPO price of $38.
FULL COVERAGE: Facebook goes public
Some investors have accused the banks that arranged the IPO of sharing important information about Facebook’s business prospects with some clients and not others.
Many shareholders who bought stock the stock in the IPO have filed lawsuits against Facebook, Morgan Stanley, the IPO’s lead underwriter.
A lawsuit claims that Facebook’s IPO documents contained untrue statements and omitted important facts, such as a “severe reduction in revenue growth” that Facebook was experiencing at the time of the offering. Morgan Stanley declined to comment. Facebook said the lawsuit is without merit. (With AP inputs)