Facebook Inc(NASDAQ:FB)’s initial public offering of shares took place in May this year but the company is being haunted by a raft of lawsuits and claims arising from the problems that occurred during that day.
There was a software glitch on the Nasdaq exchange that resulted in some of the price bids not going through at all.
The lawsuits include almost all the stakeholders including investment banks, investors and others who were impacted by the mess.
According to reports there have been about 50 lawsuits filed against Facebook, Nasdaq and underwriters to the IPO.
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Lawyers in the know also said that arbitration claims are expected from investors in the company, against the brokers and research firms who pushed them to invest in its shares.
The situation has been worsened because the performance of the stock in the street has been dismal. Except for brief flare-ups driven by sporadic news, most of the time the share i the company have been on a one-way slide down.
So far the shares have lose nearly half their value from the debut price of $38 a share.
For the last couple of weeks the stock seemed to be on an uptrend, but this week again it saw a slide and on Tuesday its shares fell about 2.5 percent though on Wednesday it partially recouped those losses with a rise of about 1.7 percent.
Most of the legal cases against Facebook and its principal underwriter Morgan Stanley centers on allegations that investors were not given enough information about the company and its lack of growth prospects or that it was facing difficulties in mobilising revenues.
In a regulatory filing Facebook had commented that the lawsuits were "without merit."