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Facebook, in court filing, blames Nasdaq

June 16, 2012 at 12:47 PM   |   Comments

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NEW YORK, June 16 (UPI) -- Court papers filed in New York show Facebook is ready to blame Nasdaq for its clumsy start as a publicly traded company.

Facebook is attempting to consolidate a flurry of shareholder lawsuits filed against it -- more than 40 of them -- since it went public May 18, a day clouded with controversy.

The Financial Times reported Saturday that Facebook blames Nasdaq for technical problems that delayed the start of its initial public offering and then made it impossible for traders to confirm transactions.

"The commencement of trading in Facebook shares was delayed as a result of problems with Nasdaq's software systems, which impaired the orderly execution of trades and price levels," Facebook's court filing says.

The Financial Times said Facebook claims the technical delays made it appear as if there was a massive sell-off of its shares and that triggered an actual sell-off. Then, by offering to compensate shareholders for losses on Facebook's opening day, Nasdaq prompted another sell-off, Facebook says.

Facebook also says its underwriters "did not violate any rules."

Lawsuits against the social network company, however, claim Facebook overvalued its shares, which started at $38 for a total valuation of $104 billion, and have dropped 21 percent since the IPO, to $30.01 per share on Friday.

"This is Facebook's responsibility. They clearly overvalued the offering, they oversupplied it and they thought they could get away with that while telling the underwriters to take down their estimates in the final days," said Sam Hamadeh, chief executive officer of market research company PrivCo.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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