Facebook Inc (FB): IPO Suit Update, and Sadness Prevails?

Published on August 15, 2013 at 9:44 am by David Woodburn in News

Facebook Inc (NASDAQ:FB), believe it or not, is still dealing with the legal fallout of its IPO of 15 months ago, and the issues and problems that came to fruition on that fateful day. We only mention this because the case, where Facebook and NASDAQ were sued by investors for varying reasons surrounding the IPO, had slid into the molasses that is the legal system in the U.S. and has created a slowing of news from the courtroom. That, of course, could be seen as a boon for CEO Mark Zuckerberg, who is not only personally attached to the case legally as someone who is charged with feeding insider information to a select number of investors, but also for his tech startup, which has been slowly trying to rally back from its lows on the stock market to get back near the $38 IPO price.

Facebook Inc (NASDAQ:FB): Insider Trading Charges off the Table

In an odd action in the courtroom, Facebook (NASDAQ:FB) and NASDAQ combined were about to face 31 legal cases as a single class-action lawsuit before U.S. District Judge Robert Sweet, but Jan Wolfe of The Litigation Daily reported an interesting, if somewhat convoluted twist in the case. The lead attorney firms for the plaintiffs have decided to pursue the 29 claims of violation of the Securities Act of 1933 and not tackle the two claims of violation of the Securities Exchange Act of 1934 that deal with the disclosure of non-public information. Two smaller law firms who brought up the two Exchange Act claims petitioned the court for the opportunity to sever the consolidation and pursue their own class-action on the two claims that were being left out, but Judge Sweet ruled against the firms based on precedent, writing that lead cousel for the plaintiffs in a multi-district litigation case such as this has discretion in pursuing the case it sees fit.

Facebook May Make Us Sadder, Study Finds

Facebook Inc (NASDAQ:FB) is a very powerful tool in developing and enhancing social connections among 1 billion worldwide residents, but could it contribute to our well-being emotionally – as in, might it actually be a predictor of how we might be feeling in the future based on how much we use the network? That is one of the interesting questions a University of Michigan study tried to answer recently.

Diane Swanbrow wrote about the results of the study on Health Canal, based on an article written by Ethan Kross, a social psychologist at the University of Michigan in Ann Arbor. The study, which was conducted by eight UM researchers in collaboration with a researcher in Belgium, found that the more that the sample users accessed the social network, the worse they felt and/or the lonelier they felt. The study looked at 82 young adults and the researchers would send text messages to each of them five times a day for two weeks, and each text message provided a link to a survey which asked them five questions about their mood, well-being and if the subjects had any direct (face-to-face or phone) contact with anyone since the previous message.

In summarizing the study, Kross wrote, “Facebook provides an invaluable resource for fulfilling the basic human need for social connection. But rather than enhance well-being, we found that Facebook use predicts the opposite result—it undermines it.” The study revealed that those who used Facebook more over the two-week period tended to feel worse after the two-week trial, while those who had more direct contact with people tended to report feeling better about themselves over time.

Study co-author John Jonides, a cognitive neuroscientist at Michigan, said, “This is a result of critical importance because it goes to the very heart of the influence that social networks may have on people’s lives.”

Do you think fund gurus like Leon Cooperman or Bill Miller feel better about themselves with their stakes in Facebook Inc (NASDAQ:FB)? Well, if you think this study is somehow revolutionary, we ask you to watch the video below from 2012 that asked the question about Facebook and its power to promote happiness.

DISCLOSURE: None