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What claim would investors have to sue Facebook over? - Miguel - 11-09-2012 05:07 PM
I've been reading in the news that many investors are planning to sue Facebook over the falling price of their IPO and I was wondering, what grounds to they have to sue them over? Weren't they the ones who accepted the high price? And how is facebook responsible for the falling price?
- A Hunch - 11-09-2012 05:15 PM
Read the articles.
But in a nutshell there are two main issues:
- people believe that Facebook purposely did not disclose that the company was cutting revenue projections (ie: the company was earning less money than they said).
- there were problems with the trading on the day of the facebook IPO. People put orders in at a specific price but the sales were not closed for hours or days (3 days) in some cases.