Facebook is planning to file a motion in the US to consolidate all its shareholder lawsuits and blame the NASDAQ stock market for its disappointing IPO.
The social network is finally planning to address the 30 or so lawsuits that have been filed against it after the botched handling of its stocks' opening day and their horrible performance since then, a person familiar with the matter whispered to The New York Times. The social media site could file in New York court as early as today, the insider said.
Facebook had a rough start on the NASDAQ stock exchange as technical glitches held up its share launch and messed up traders' orders for almost the whole day. Stockbrokers' response to not knowing how much stock they'd bought or sold, or at what price, was naturally to stop trading at all or to dump what shares they had.
After a small surge early on, Facebook stocks dropped that day and have experienced little upward motion since. Shares have had small surges, such as the 3.74 per cent rise on yesterday's trading, but the price is still sitting at over 26 per cent below Facebook's initial offer price and 31 per cent below the highest price it reached on its first day of trading.
Shareholders have graphically illustrated their frustration over the performance of what was the most-hyped stock of the last year or so, by filing a slew of lawsuits against Facebook itself, Mark Zuckerberg, other execs, NASDAQ, the banks underwriting the IPO and anyone else they think they can pin the blame on.
Facebook is expected to shift some of the responsibility onto NASDAQ in today's filing, NYT's source said.
NASDAQ has already held its hands up to the technical snafus on the day and is trying to a get a compensation fund of $40m approved that will be handed out to traders and shareholders.
The lead underwriters – Morgan Stanley, JP Morgan Chase and Goldman Sachs – are all expected to join Facebook's motion. ®