Investors File Lawsuit Against Facebook Over IPO

At least three lawsuits have been filed over Facebook’s initial public offering, including one in the Southern District of New York on behalf of three purchasers of Facebook common stock. The suit alleges that Facebook’s SEC filings prior to going public included “untrue statements of material fact,” chiefly regarding the company’s admission that its ability to monetize mobile users remains a challenge.

The defendants named in the suit include Facebook executives Mark Zuckerberg, CFO David Ebersman and Chief Accounting Officer David Spillane; board members Marc Andreessen, Erskine Bowles, Jim Breyer, Donald Graham, Reed Hastings and Peter Thiel; and underwriters Morgan Stanley, JPMorgan Chase, Goldman Sachs, Merrill Lynch and Barclays Capital.


The suit relies on reporting from Reuters, which discovered that underwriters including Morgan Stanley lowered their estimates on the social network’s revenue growth during the roadshow. Morgan Stanley has said that it followed its standard operating procedure for IPOs with Facebook.

Shares of Facebook managed a slim gain from the IPO price of $38 when they debuted Friday, but then spent the next two sessions in free-fall. The stock finally righted itself Wednesday, climbing 4.5% to $32.40.

A separate lawsuit brought against Nasdaq OMX Group, alleges negligence on the part of the stock exchange operator, which delayed the initial trading in Facebook on Friday due to technical issues and then struggled to send execution confirmations notifying customers of completed trades for several hours.

Do you think Facebook stock can recover after this lawsuit? Share your thoughts with us!

Source: Forbes

Image: NY Daily News

Summer Applicant’s Letter Goes Viral on Wall Street

As summer analyst recruiting season continues and superdays near, Wall Street has been having a laugh with one New York University applicant who, to say the least, took a surprisingly dogged approach with his cover letter.

He wrote, ”I am unequivocally the most unflaggingly hard worker I know, and I love self-improvement. I have always felt that my time should be spent wisely, so I continuously challenge myself … I decided to redouble my effort by placing out of two classes, taking two honors classes, and holding two part-time jobs. That semester I achieved a 3.93, and in the same time I managed to bench double my bodyweight and do 35 pull-ups.”

Since Thursday, February 2, when a Bank of America Merrill Lynch director forwarded the cover letter out to his entire team, offering drinks “to the first analyst to concisely summarize everything that is wrong with” the note, it has passed through more than a dozen firms.

Already investment banking and accounting teams at Goldman Sachs, Morgan Stanley, Nomura, Citi, Deutsche Bank, PricewaterhouseCoopers, KPMG, Wells Fargo, Keefe, Bruyette & Woods, Perella Weinberg Partners, and Barclays Capital have read the note, along with the student’s relatively robust resume.


The letter, which read with perhaps a tad much hubris, comes at a time when summer recruiting is at its peak and anxiety among the nation’s junior class is high. Resume drop days, or the deadline when resumes must be received, have largely passed, and students are now in the throes of first round interviews and superdays.

The reception so far to this cover letter has been mixed. While it certainly stood out, investment banking directors value some form of humility. Below, the full cover letter submitted to NYU, redacted where necessary.

Source: Yahoo News

Image: Job Interview Techniques