When Facebook filed to become a public company a few months ago, the company probably didn’t expect the mess its initial public offering would cause.
It’s been an eventful week between the stock’s delayed debut, the company being sued for $15 billion over user tracking, and the share price dipping below the $38 IPO price.
The stock dropped to $31 on Tuesday, a far cry from its peak of $45 last Friday. The stock closed Friday at $31.91, down 3.4 percent from Thursday.
Several big institutions were apparently given information about Facebook’s second quarter financial results, which are apparently below expectations, before the IPO took place. The public received no such information, which has led to tens of thousands of dollars in short-term losses for many individual investors.
Though Morgan Stanley (the lead underwriter handling the stock sale) said it stuck by financial rules, a group of shareholders are suing Facebook and the investment banks that led the sale. Financial regulators in the U.S. may also probe what happened.
Despite raising billions of dollars, it hasn’t been the smoothest of weeks for Facebook. But still, it has an awesome new camera app that’s just like Instagram! Which it’s buying for a billion dollars. Makes sense.
Photo by ralphpaglia