IPOs rarely make news outside of the financial sections of the paper—but Facebook did, and not for the right reasons.
Ticker symbol FB went public on May 18, 2012 at $38 a share. The price soon rose to $45 a share, but closed at $38.23. By May 22, the stock was at $31. Then, on May 23, the first class action was filed.
Why did the most popular social network’s Wall Street debut sink like a nerdy teenager’s status update? Plaintiffs allege, among other things, that Facebook “reduced their second quarter and full year 2012 performance estimates for Facebook, which revisions were material information which was not shared with all Facebook investors, but rather, was selectively disclosed by defendants to certain preferred investors and omitted from the Registration Statement and/or Prospectus.”
Six years on (has it really been six years?) Facebook IPO investors may now participate in a settlement for $35 million. Claim forms are due July 24, 2018. (Facebook, as you’d expect, continues to deny the allegations.)
In the end, things worked out for ol’ Facebook. By February 1, 2018, their stock was trading at $193 a share. Investors were happy. Mark Zuckerberg was happy. All was well in the world…
…until March 17, 2018, when the Cambridge Analytica scandal hit, and Facebook's stock lost nearly a quarter of its value in a few weeks, and the company was hit with another series of securities class action suits. If you are interested, you have until May 21, 2018 to apply to be lead plaintiff in that litigation.
May 21, 2012 oincidentally enough,is the end of the class period in the IPO litigation. Ah, the cycle of life in the class action world.