Facebook will reportedly file a motion, as early as Friday, to consolidate all of the lawsuits against the company related to its troubled initial public offering, and the motion is expected to include lead underwriters Morgan Stanley, Goldman Sachs, and J.P. Morgan.
One of the many court cases involving Facebook’s troubled initial public offering was dismissed Wednesday, as a U.S. District Court in Texas ruled that sufficient grounds were not presented to file a lawsuit.
Morgan Stanley Chairman and Chief Executive Officer James Gorman appeared on CNBC’s “Closing Bell with Maria Bartiromo” Thursday afternoon, reiterating that his company did nothing improper in the run-up to Facebook’s initial public offering and urging patience with the social network’s slumping stock, saying, “The story isn’t over. Again, we are at day eight here. Give this a little bit of time.”
Speaking at a weekly strategy meeting that was webcast to employees, Morgan Stanley Chairman and Chief Executive Officer James Gorman addressed allegations of improper conduct prior to Facebook’s initial public offering, saying that the company worked “100 percent within the rules.”
Facebook, Morgan Stanley Face Lawsuit, Investigation Over Alleged Selective Sharing Of Lower Revenue Projections
Were certain big-name investors made privy to information that should have been disseminated more widely? Such are the latest allegations with regard to last Friday’s Facebook initial public offering, which have led to a lawsuit filed against the social network and banks including Morgan Stanley today, following the call for an investigation yesterday by the Financial Industry Regulatory Authority and the Securities and Exchange Commission.
A total of 38.5 percent of the 421,233,615 Facebook shares purchased by underwriters prior to its initial public offering went to Morgan Stanley, while E*Trade, which had been touted as the best source of stock in the social network for individual investors, received only 0.05 percent of the shares, according to an amendment to Facebook’s S-1 filing with the Securities and Exchange Commission, filed after the close of trading Friday.
He (or she) who hesitates is lost when it comes to purchasing shares in Facebook’s initial public offering Friday, as several brokers have reportedly stopped accepting orders for the long-awaited stock.
Neither Google nor LinkedIn went public at a time when it was crystal-clear how much their companies would earn and when.
Facebook will pay underwriters just 1.1 percent of the $5 billion initial public offer, amounting to $55 million in fees to be split by 31 banks.