Morgan Stanley expressed caution of Facebook’s revenue in the filing of an amended prospectus with U.S. Securities and Exchange Commission(SEC), because of users are shifting to mobile devices. Investors say this is very unusual for an underwriter to do so, even though analysts at firms which don’t underwrite IPO usually change their forecast at this time.
This may contribute weakness of Facebook’s shares from Friday. The high-profile Facebook IPO started on Friday with the highest price over $42 per share, but suffered big loss since then. On Friday it barely sat above the initial offering price $38 when market closed, and on Monday it plunged 11%. Tuesday Facebook continues to tumble, currently at $33.24(11:33am EDT).
JPMorgan Chase and Goldman Sachs, which were also major underwriters of the IPO, also revised down their forecast in Facebook’s May 9 SEC filing, according to Reuters.
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