Facebook shareholders file lawsuit as stock climbs higher

Facebook shareholders file lawsuit as stock climbs higher

Facebook shareholders file lawsuit as stock climbs higher

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Associated Press

Posted on May 23, 2012 at 11:47 AM

NEW YORK -- Facebook’s stock is climbing higher, a reprieve for shareholders after the stock’s rocky inaugural trading day Friday was followed by a two-day decline.

Facebook Inc.’s stock is up $1.03, or 3.3 percent, to $32.03. That’s still nearly 16 percent below the initial public offering price of $38. Meanwhile, a group of shareholders have filed a lawsuit against Facebook, its executives and Morgan Stanley, the IPO’s lead underwriter. The suit, filed in U.S. District Court in New York, claims the company’s IPO documents contained untrue statements and omitted important facts, such as a "severe reduction in revenue growth" that Facebook was experiencing at the time of the offering. The suit’s three plaintiffs, who bought Facebook stock on its first day of trading May 18, claim they were damaged in the process.

In a statement, Facebook said the lawsuit is without merit. Morgan Stanley declined to comment.

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