The Facebook IPO continues to be one of the biggest Wall Street disasters in history, and it’s only getting worse. Investors have now filed a lawsuit against Mark Zuckerberg himself.
The class action lawsuit, filed by disgruntled Facebook shareholders, alleges that the 28-year-old CEO knew that his company’s stock was grossly overvalued, and that he protected his own financial well being by quickly selling a slew of Facebook stock.
This is the second time within the past two weeks that a group of Facebook investors have joined together to do battle with the world’s largest social network.
The new lawsuit claims that Zuckerberg hid the fact that there was a fundamental weakness in the Facebook business model, that weakness being that there wasn’t nearly enough advertising revenue in place to support a stock price of $38.
The lawsuit further alleges that Morgan Stanley, JPMorgan, and Goldman Sachs all knew prior to the IPO that Facebook was seriously flawed, but that information was selectively disclosed to only the biggest investors.
- Shareholders SUE Nasdaq, Facebook, Zuckerberg, Morgan Stanley over IPO Mishandling (blippitt.com)
- Facebook boss Mark Zuckerberg is sued over shares (thesun.co.uk)
- Facebook IPO: Wall Street Wins, Muppets Lose, Yet Again (valuewalk.com)
- Facebook, Mark Zuckerberg sued in wake of IPO (wjla.com)