Was Facebook's Botched IPO a Conspiracy?
A week into Facebook's debut on the Nasdaq stock exchange, its initial offering price of $38 per share dropped to $31.91. Retail investors' fears deepened as they realize they are losing a lot of money.
The Facebook IPO did not follow the usual script. Instead of launching the largest social media company in the world as a legitimate and valuable business, the IPO has laid bare all of the questions and doubts about its potential performance.
So why did the Facebook IPO bomb as badly as it did?
In a lawsuit filed last week, some investors contend that Morgan Stanley, the lead underwriter of the IPO, withheld key information about a negative financial forecast from them while sharing it with their institutional clients.
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