Facebook underwriters accused of hiding forecast
Revenue numbers revised on the quiet, says Reuters
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Reuters is airing accusations which, if true, would cast the Facebook IPO process in a very poor light indeed. The news service claims that underwriters Morgan Stanley cut its revenue forecasts for The Social NetworkTM but withheld the information from all but a privileged few.
The allegations are detailed in this Reuters analysis, which says the reduced forecasts were circulated to some investors during the IPO “roadshow” that pump-primed Facebook’s stock ahead of the float.
Reuters says it has not been able to confirm with Morgan Stanley how widely its revised forecast was disseminated pre-IPO. The bank’s only response has been a statement that its revisions were in response to a revised prospectus that Facebook filed with the Securities and Exchange Commission on May 9, and that as far as it’s concerned, its procedures comply with regulations.
That regulatory compliance will, however, be cold comfort to retail suckers investors, who have taken a haircut since the IPO. At the time of writing, Facebook shares were trading at $US31 – having been launched at $US38. ®
COMMENTS
Re: @Mike Street (was: Anyone in the private sector who bought into Facebook at IPO ... )
Or the 'bigger idiot' methodology. Probably 90% of the people who bought Facebook in the IPO knew damn well it was overpriced, but figured they'd find an even bigger idiot to sell it on to before it tanked...
No shit Sherlock
You wouldn't expect them to publish the truth given that anybody over the mental age of 6 can see this floatation was hugely over-valued.
Wonder if they will all end up like Alan Stamford.
Re: Look on the bright side
FB makes... hmm, nothing. It's an vehicle for *advertising*. I have no intention of sharing my private details just so that i can be targeted by commercial organisations.
Apple, Microsoft and Intel *all* make real products, something FB doesn't .
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