Facebook Dumped $1 Billion in Stock Shares
Well, that didn't take long.
Zuckerberg, the creator of Facebook, is being sued in a class action suit that alleges he got rid of one billion dollar's worth of Facebook stock shares of overvalued stock prior to the IPO. The suit, is not the only one, but second one, from unhappy purchasers. Zuckerberg, no doubt, had inside info that the stock was grossly overvalued. Further, Morgan Stanley, JPMorgan, and Goldman Sachs all knew this before the IPO and did nothing to disclose it to the public but only to those considered to be "large investors". Further, the suit states that the three underwriters (below) were told to reduce the estimates by a FB executive.
While many of those in the suit are or were former employees of FB, a recent poll shows that 4 out of 5 users on FB have never bought anything from a FB ad and that FB usage has dropped 34% in the last six months. The FB stock opened at $38 and has dropped to $28, just days later, creating a lot of suspicion.
The case seems to have merit on its face and of course, FB denies any of this happened , that, the stock was overpriced to most everyone but for their large investors. Will the lawsuit and FB going public be its downfall?