New Facebook Lawsuit, Same Old Facebook IPO Gripe
A new lawsuit filed by a Facebook shareholder claims that the company knew about downward trends in revenue tied to increased user defection to mobile from desktop use.
Gaye Jones says that such information was shared with key investors.
“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,” says the lawsuit.
This is definitely not the first time that a lawsuit has been filed with a nearly identical claim.
Soon after Facebook’s stock price began to plummet, a flood of lawsuits poured in accusing Facebook of concealing severe reductions in revenue growth due to the increase in mobile users and Facebook’s perceived inability to monetize mobile.
So, new lawsuit, similar complaint.
Jones’ new lawsuit is a derivative suit, which means that the investor “seeks to step into the shoes of the company and any money recovered from Zuckerberg and others would be paid to Facebook, not shareholders.”
Four previous derivative suits have been dismissed after a U.S. District Judge ruled that the shareholders did not own stock when Facebook allegedly deceived them before the IPO. Plus, he said that Facebook indeed “repeatedly made express and extensive warnings” about the trend toward mobile. In this case, Jones did in fact own Facebook stock since February 2012, months before the IPO filing in May.
Back in January, Facebook stock rode an upward trend and topped $30 for the first time in nearly six months. As of right now, the price sits at just over $27.50.[Reuters]