Facebook: IPO debacle was Nasdaq’s fault

The Facebook IPO was full of problems from day one, when a “technical error” on the Nasdaq exchange led to trading delays and other issues.

“Don’t blame us!” was the theme of a Facebook court filing submitted Friday in response to lawsuits that shareholders filed after the company’s disastrous IPO.

More than 40 lawsuits in different state and federal courts have been filed in the weeks since Facebook (FB) went public on May 18.

The offering was plagued with problems. On day one, a “technical error” on the Nasdaq exchange led to delays and errors in Facebook trades. Later, allegations surfaced that Facebook disclosed certain financial information in advanceto analysts for big banks and not to average investors.

Friday’s filing was Facebook’s first response to the lawsuits, which the company wants consolidated into one case in a New York court.

Facebook used the filing to preview its defense, blaming Nasdaq for the trading issues that marred its debut day. It also admitted to having private conversations with analysts, but insisted it “followed customary practices” and didn’t disclose anything improper.

First, the company tackled the Nasdaq (COMP) meltdown.  Read More

Facebook, Zuckerberg sued over IPO

Facebook shareholders have sued the social network, CEO Mark Zuckerberg, and a number of banks, alleging that crucial information was concealed ahead of Facebook’s IPO.

The lawsuit, filed in the U.S. District Court in Manhattan this morning, charges the defendants with failing to disclose in the critical days leading up to Friday’s initial public offering “a severe and pronounced reduction” in forecasts for Facebook’s revenue growth, as users more and more access Facebook through mobile devices, according to Reuters, which cited a law firm for the plaintiffs. (The case: Brian Roffe Profit Sharing Plan v. Facebook, 12-04081.)

Earlier this month, Facebook updated its filings with the Securities and Exchange Commission to say that the shift to smartphones and other mobile gadgets is cutting into the prices it can set for advertisers, which would in turn hurt the company’s revenue. In March, the social network had 488 million monthly average unique users of its mobile products, out of a total of just over 900 million registered users.

The plaintiffs charge that the changes to the forecast by several underwriters of the IPO were only “selectively disclosed” to a small group of preferred investors and not to the investment community at large. “The value of Facebook common stock has declined substantially and plaintiffs and the class have sustained damages as a result,” the complaint says, per the Reuters report.  Read More

Facebook now has a public face

The Facebook IPO was last week’s big story, but it didn’t completely overshadow the travails of J.P. Morgan Chase.

Poor Jamie Dimon, CEO of JPM. The man is a salt-of-the-earth straight shooter. If this $2 billion (and growing) trading loss were a concern Dimon would have been the first to tell us. Who do you think he is: Jon Corzine? Heck, on “Meet the Press” he unabashedly admitted that the company was “sloppy and stupid.” What more do we want from the guy?

Besides, $2 billion is play-around money for the country’s biggest bank. The company made more than $5 billion in the first quarter alone. The loss may curtail JPM’s Cristal purchases and hurt the revenue streams of some upscale Manhattan gentlemen’s clubs, but, beyond that, it’s much ado about nothing.

Do we really think someone on Wall Street would break the law?

I haven’t delved into the circumstances of the transaction so I have no idea whether it was a legitimate hedge, as Dimon has said, or something more nefarious. And by all accounts, Dimon is a decent man. My guess is that after Congress finishes grandstanding for the media by using Dimon as a human pinata, the matter will gradually disappear.  Read More

Facebook’s Debut Marred by Trading Glitches

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Nasdaq’s sign carried live video of Mark Zuckerberg ringing the bell from Menlo Park, Calif.

Friday should have been Facebook’s day to shine — and Nasdaq’s as well.

Investors and the media from around the world were waiting for 11 a.m., when shares in Facebook would finally begin trading on the Nasdaq stock market. At $16 billion, it was one of the biggest initial public offerings ever held in the United States, and the largest by far handled by the exchange.

But at 11 a.m., Facebook’s lead underwriter, Morgan Stanley, requested a 20-minute delay. That in and of itself was not unusual — but what happened next was. Traders were first informed that the company’s opening price was indicated to be $42 a share. But orders failed to be executed, or in trader parlance, “print.”

The quiet confused many. Some underwriters wondered whether Morgan Stanley had asked for another delay, and traders called Nasdaq, only to be told to stand by.  Read More

How High Will Facebook Stock Go Tomorrow? Place Your Bet At FacebookIPODayClosingPrice.com

There are a few lessons you could take away from the fact that FacebookIPODayClosingPrice.com exists right now:

1.  Ask and ye shall receive, especially if you’re Chris Sacca.
2. The Hacker Way goes way beyond Facebook headquarters.
3. Facebook IPO fever is definitely in full swing and we should all just give in to it.

Here’s the story: Angel investor and all-around web magnate Chris Sacca wrote a quick tweet early yesterday about how it’d be cool if there was a website where people could predict where Facebook’s stock will end up at the end of its first day as a publicly traded company. Horse races in general are always fun to watch, after all, and it’s definitely a conversation that’s happening around many a watercooler now that Facebook’s IPO is officially on for tomorrow morning.

So a programmer named James Proud answered the call, hacking together FacebookIPODayClosingPrice.com, a fun little website that keeps a running tally of people’s bets on where Facebook’s stock will close on IPO day.  Read More