Facebook Filing Motion to Consolidate Claims Stemming from IPO

On Thursday, it was reported that Facebook is thinking of filing a motion to consolidate all shareholder lawsuits against it related with its recent IPO and that it may also hold Nasdaq liable to an extent for botching things. The filing is expected to happen within this week at the District Court for the Southern District of New York, and is expected to provide perspectives on Nasdaq’s role on the listing day and the effects that the actions of the exchange had on the trading of stock. The lead underwriters of the IPO were Morgan Stanley, Goldman Sachs and JPMorgan Chase, and they are also expected to join the motion.

Analysts and industry experts have widely criticized Nasdaq for poor communication both during and after the Facebook IPO and for failing to explain or apologize for the technical problems that happened in the first hours of trading Facebook shares.

The New York Times reported on Thursday, “One month after its botched initial public offering, the social network is set to file a motion to consolidate all the shareholder lawsuits against the company.” Until now, at least 30 cases have been filed by shareholders against Facebook. The expected motion would show Facebook’s stand over the performance of its IPO in public.

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Since its debut, Facebook’s stock has declined more than twenty-five percent below its initial offer of USD 38 per share. Recently, Nasdaq announced that it would be setting aside USD $40 million to cover broker losses due to its system failure on the listing day.

Posted by EmploymentCrossing on June 15, 2012. Filed under Business News,Facebook. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.