Facebook IPO Lawsuit: Facebook Hit with New IPO Lawsuit

Facebook IPO Lawsuit: Although it seems that the Facebook Inc (NASDAQ:FB) IPO was ages ago, it is safe to say that the conversation related to this tumultuous time is not going to die down in the near future.

Hedge funds, on the whole, were very bullish on Facebook last quarter. The total size of the funds we track that were invested in the company grew by nearly 40% from Q3; that’s a huge spike (see why it’s always important to pay attention to the smart money).

Reuters is reporting that the social networking giant has been hit with a new IPO related lawsuit.

This time around it is a Facebook Inc (NASDAQ:FB) shareholder who is suing the company, including CEO Mark Zuckerberg.

Here is an excerpt from the Reuters article:

“The lawsuit by Gaye Jones alleges that the company’s directors and officers knew that Facebook did not disclose weaker revenue trends as more users accessed the website through mobile devices. The complaint alleges that information had been selectively shared with the company’s IPO underwriters and key investors.”

As you may recall, similar lawsuits were dismissed earlier in the year “because the shareholders did not own the stock when the alleged misconduct took place prior to Facebook’s May IPO.”

So, what makes this one different? For one, Jones has owned Facebook Inc (NASDAQ:FB) stock since February 2012. Obviously, this is a big difference and one that the court is sure to take a close look at.

Here is some more information from the official complaint:

“The defendants were unjustly enriched because they realized enormous profits and financial benefits from the IPO, despite knowing that reduced revenue and earnings forecasts for the company had not been publicly disclosed to investors.”

As you can imagine, Facebook Inc (NASDAQ:FB) strongly disagrees with the lawsuit filed by Jones. While the company does not have much to say, they did release a statement stating that “we believe this lawsuit is without merit and will defend ourselves vigorously.”

What do you think about all these Facebook Inc (NASDAQ:FB) lawsuits? Do you agree with Jones? Share your thoughts in the comment section below.

Check back here for more updates on Facebook IPO Lawsuit.

DISCLOSURE: I have no positions in any stock mentioned.

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