Quoted: Another unhappy Facebook IPO customer

“It’s about distrust. This is another stock market rigging.”

Elias Fiani, an individual Facebook investor who according to the New York Times complained to the Securities and Exchange Commission after hearing reports that some institutional investors received updated information about the company’s weaker financial outlook that other investors did not. While it may come as no surprise to most that Wall Street insiders appear to have had an advantage, it is ironic because of the immense interest shown by many of Facebook’s 900 million users in the Menlo Park company’s IPO. Mercury News columnist Mike Cassidy wrote that because so many people’s lives are “intertwined” with the company, “Facebook, more than any company before it, is our company.” Now, Facebook, CEO Mark Zuckerberg and its underwriters are facing lawsuits that charge them with leaving the masses out of the loop. Morgan Stanley, lead underwriter for the Facebook IPO, is facing a government investigation. Analysts and experts quoted by John Boudreau of the Mercury News say more lawsuits are likely, and that Facebook is “in a crisis.” The social network’s shares, now in their fifth day of trading on the public stock markets, are up less than 1 percent to $32.12 as of this post after steep declines earlier this week but a 3.2 percent increase Wednesday. The shares began trading Friday at $38.

 

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  • sd

    One wonders if Mr. Fiani would be the defender of the “little guy” if he’d managed to snag his IPO position and profit from it …. It’s ironic that so many people are looking for a culprit in the Fb IP but the big banks robbed the little guy blind with derivatives three years ago and no one got punished. How much manipulation is too much? And when will investors of all stripes agree that the “free enterprise” system is a double-edged sword and that the sword occasionally draws blood?

 
 
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