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Morgan Stanley, Goldman Sachs and JP Morgan, the three underwriters of the initial estimate of the value of Facebook a week ago, has already spent astronomical sums buying FB stocks to keep their value artificially afloat and avoid a PR blunder and lawsuits that might cost them billions and not only ruin their own credibility, but even that of future tech IPOs. Despite their panic-stricken efforts, the stock is now nearing $30 below $30 below $20 a share, down a total of 30% 50% since opening day.

Class action lawsuits* have already been filed by investors and companies arguing they were suckered into buying stocks on the basis of misleading and withheld information. The estimates of future earnings were based on projections akin to a wide, white marble staircase beset with angels and rainbows, going through the skies to a white castle of world dominance. Which might be descriptive of the place Mark Zuckerberg has been living, in his mind, for the last 6-7 years.

As time progresses from now on, the few people left who are considering investing in Facebook, are going to have to take into account the avalanche of bad news and the increasing scrutiny of future earnings decorating the already grim downfall of the stock. Maybe the Wall Street Journal article below is not too far off.


The suit claims that Facebook executives told the underwriter banks to lower their revenue projections for the company, and that the banks relayed this information to favored clients but not to the general public.

If true, this would likely be in violation of federal securities law, which dictates that all "material information" -- facts that could influence investor decisions -- be disclosed by public companies and companies planning to go public in their filings with the Securities and Exchange Commission.

Documentation to support this claim is not provided in the lawsuit, though Darren Robbins, a lawyer for the plaintiffs, said his team had access to "witnesses and shareholders and other sources of information."
Hans J. Furfjord's profile photoWilliam Z.'s profile photoHarold LA.Shomb Jr.'s profile photo
This explains the situation with Facebook ,a well plan flim/flam. This stock is of no value,should have been offered as penny stock at best or not at all.
From an investor's point of view, it's indeed worthless. As for the three banks being sued for withholding information, one in particular, Goldman Sachs, is no different than a mafia organization and they're widely regarded by anyone even vaguely familiar with their outright criminal business practices and contribution to the global financial crisis, as a collection of people who should be in prison serving sentences ranging from 20 years to life, if they were to be prosecuted by the same standard ordinary people are. Bill Maher usually never lets a show go by without reminding people of that. Dr. Robert Hare (1934 - ), who wrote the book on criminal psychopathology, said it best: "If I wasn't studying psychopaths in prison, I'd do it at the stock exchange".
I did not know this. Very interesting. Thx for the post.
I got out of the market 30 yrs ago and stayed out. I look at this, like I look at Government Bonds, It  would be safer to a Junkie your money than a market or Government to hold for you. IRA, 401K, the big ponzi's game. You lose they win. At best Sheep always get sheared, then come back for more.
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