Banking, finance, and taxes
Facebook Deathwatch: Shares Rise on Lawsuits, Investigations, Short Sellers
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After tumbling about -26% in its first three days of trading, stock in Facebook Inc. (NASDAQ: FB) is up more than 3% just before noon today even as shareholder lawsuits and investigations mount against the company and its bankers and just about any other person or entity that had anything to do with the IPO. Maybe FB is one of those outfits that thrives on controversy.
A class-action suit on behalf of shareholders was filed in Manhattan this morning, the financial industry’s own watchdog, the Financial Industry Regulatory Authority (FINRA) is launching an investigation into the way banks communicated a cut in FB’s estimates, and shares in Morgan Stanely (NYSE: MS), FB’s lead underwriter, are down more than -2%. And short-sellers are chasing shares today too, as we noted earlier this morning. All before lunch.
Facebook is responding by testing a new design for its Timeline feature. Lawsuits and falling share prices are somebody else’s problems. At Facebook, there’s no time for such trivial matters.
Facebook has traded about 38 million shares this morning and shortly before noon the price is up 1.8% at $31.60.
Paul Ausick
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