Facebook, still reeling from the fiascos of its IPO, is now facing another shareholder lawsuit. The world's biggest social networking company's executives, namely founder and CEO Mark Zuckerberg, its board and other officers for the damage sustained.
According to Gaye Jones in court papers filed, she alleged Facebook company officers knew that there would be weaker revenue trending as more and more users access the site through their mobile devices. The complaint centers on the selective sharing of this information with only IPO underwriters and favored investors and not all investors.
As damages, the lawsuit seeks to have the directors and other defendants to return the money they had earned from the IPO sale because of this knowledge that it was overpriced.
The complaint said, "The defendants were unjustly enriched because they realized enormous profits and financial benefits from the IPO, despite knowing that reduced revenue and earnings forecasts for the company had not been publicly disclosed to investors."
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