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

RIM: Blackberry 10 Delayed Until Late 2012

BlackBerry maker Research in Motion (RIM) said that its future platform, BlackBerry OS 10 — the cornerstone of RIM’s turnaround plans — will be delayed until late 2012. The company says it is waiting on the development of a special chipset for its new devices.

Shares fell by 8% after hours, even though RIM had already warned investors two weeks ago that its financial results would fall short of the company’s earlier expectations. The company blamed its bad third quarter on lackluster demand for its new PlayBook tablet, on consumers opting for cheaper BlackBerry smartphones, and on its three-day service outage.

“The last few quarters have been some of the most trying in the history of this company,” said Jim Balsillie, RIM’s co-CEO, on a conference call with analysts. “We understand shareholders may feel like we let them down. [Co-CEO] Mike [Lazaridis] and I, as two of RIM’s largest shareholders, understand that sentiment.”

Balsillie said that he and Lazaridis have decided to take a salary of just $1 a year, effective immediately. Last year, both made $1.2 million Canadian, which was around $1.15 million U.S. at the time. They also each took home a $1.2 million cash performance bonus.

Despite the terrible results, RIM’s co-CEOs remained upbeat in their discussion with analysts. BlackBerry’s user base grew to 75 million, up 35% from a year ago, they pointed out. They also said that the company is “more determined than ever” to overcome its execution challenges. They preached continued patience and said that RIM’s transition to new, improved BlackBerry OS software will slowly gain traction — once it finally releases.



Image: Know Your Mobile