Inc and banks including Morgan Stanley are being sued by the social
networking leader's shareholders, who claimed the defendants hid
Facebook's weakened growth forecasts ahead of its $16bn initial
The defendants, who also
include Facebook CEO Mark Zuckerberg, were accused
of concealing from investors during the IPO marketing process "a severe
and pronounced reduction" in revenue growth forecasts, resulting from
increased use of its app or website through mobile devices. Facebook
went public last week.
was filed in US District Court in Manhattan on Wednesday, according to
a law firm for the plaintiffs. A day earlier, a similar lawsuit by a
different investor was filed in a California state court, according to a
law firm involved in that case.
the New York case, shareholders said research analysts at several
underwriters had lowered their business forecasts for Facebook during
the IPO process, but that these changes were "selectively disclosed by
defendants to certain preferred investors" rather than to the public
"The value of Facebook
common stock has declined substantially and plaintiffs and the class
have sustained damages as a result," the complaint said.
Representatives of Facebook and Morgan Stanley did not immediately respond to requests for comment.
shares fell 18.4 percent from their $38 IPO price in the first three
days of trading, reducing the value of stock sold in the IPO by more
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