The anticipation over Facebook's May 18 IPO quickly nosedived into dissatisfaction, judging by the multiple class action lawsuits the social networking company now faces.
The suits allege that Facebook provided false and misleading statements in documents filed with the Securities Exchange Commission and made available to the public prior to the stock offering. In addition, according to the lawsuits, the company allegedly gave a private heads-up to lead underwriters, including Morgan Stanley and Goldman Sachs, who then decreased their revenue projections. The lawsuits allege that the underwriters told a handful of select investors about the change, but not the public.
The class action suits, two of which were filed in San Mateo Superior Court, call for compensatory damages. Case management conferences have been scheduled for July 25 and Oct. 4.
Facebook's stock continued to decline as news of the lawsuits circulated. By Friday (May 25) the price had dropped to $31.75 per share, after opening on May 18 at $42.05 on NASDAQ.