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00:47 GMT, 24 May 2012
Mark Zuckerberg and leading Facebook investors cashed out millions of shares before the price dropped off a cliff, according to company filings.
The new reports are already raising questions about whether top investors profited from the IPO at the expense of smaller buyers.
On Wednesday shareholders filed a lawsuit against Facebook and the banks behind the company's stock, Morgan Stanley and Goldman Sachs.
Additionally, both the Securities and Exchange Commission and the Financial Industry Regulatory Authority have begun looking into the matter.
The US Senate Banking Committee has also launched an inquiry and the state of Massachusetts has subpenaed Morgan Stanley, demanding answers.
Facebook stock rose 3.3 percent in trading on Wednesday, rising to $32 a share. However, a new analysis said the stock could fall to as low as $9.59.
That's a far cry from the $37.58 that Zuckerberg fetched for 30.2 million shares he unloaded on Friday. The founder of the social networking website
made $1.13billion on the sale. By the end of trading on Tuesday however the price had dropped to $31 meaning Zuckerberg saved himself a cool $174
million by getting out early.
<a href="http://s1267.photobucket.com/albums/jj559/365Wildfire/?action=view&current=article-2148839-133B652B000005DC-465_634x359.jpg" target="_blank"><img src="http://i1267.photobucket.com/albums/jj559/365Wildfire/article-2148839-133B652B000005DC-465_634x359.jpg" border="0" alt="Photobucket"></a>
Shareholders filed a lawsuit on Wednesday, alleging that Zuckerberg, Facebook and the banks that backed the Initial Public Offering, Morgan Stanley
and Goldman Sachs, knew this information, but weren't forthcoming with it.
On Tuesday, Reuters revealed that the banks' analysts downgraded their estimates about the future earnings of the company while they were rolling
out the IPO.
Business Insider called the move 'unprecedented.'
Furthermore, the website reported that the banks revealed to privileged major investors that the share price was likely to tank, but left smaller stock
buyers in the dark about this information.
Mark Zuckerberg and leading Facebook investors cashed out millions of shares before the price dropped off a cliff, according to company filings.
The new reports are already raising questions about whether top investors profited from the IPO at the expense of smaller buyers.
On Wednesday shareholders filed a lawsuit against Facebook and the banks behind the company's stock, Morgan Stanley and Goldman Sachs.
Additionally, both the Securities and Exchange Commission and the Financial Industry Regulatory Authority have begun looking into the matter.
The US Senate Banking Committee has also launched an inquiry and the state of Massachusetts has subpenaed Morgan Stanley, demanding answers.
Facebook stock rose 3.3 percent in trading on Wednesday, rising to $32 a share. However, a new analysis said the stock could fall to as low as $9.59.
That's a far cry from the $37.58 that Zuckerberg fetched for 30.2 million shares he unloaded on Friday. The founder of the social networking website
made $1.13billion on the sale. By the end of trading on Tuesday however the price had dropped to $31 meaning Zuckerberg saved himself a cool $174
million by getting out early.
<a href="http://s1267.photobucket.com/albums/jj559/365Wildfire/?action=view&current=article-2148839-133B652B000005DC-465_634x359.jpg" target="_blank"><img src="http://i1267.photobucket.com/albums/jj559/365Wildfire/article-2148839-133B652B000005DC-465_634x359.jpg" border="0" alt="Photobucket"></a>
Shareholders filed a lawsuit on Wednesday, alleging that Zuckerberg, Facebook and the banks that backed the Initial Public Offering, Morgan Stanley
and Goldman Sachs, knew this information, but weren't forthcoming with it.
On Tuesday, Reuters revealed that the banks' analysts downgraded their estimates about the future earnings of the company while they were rolling
out the IPO.
Business Insider called the move 'unprecedented.'
Furthermore, the website reported that the banks revealed to privileged major investors that the share price was likely to tank, but left smaller stock
buyers in the dark about this information.
