Will Facebook 'unfriend' Nasdaq for NYSE?
Reports stem from fallout over IPO woes
- Duration 5:30
- Date May 24, 2012
Reports stem from fallout over IPO woes
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But first from fox at 3 o'clock the FaceBook fallout continues today.
Now to congressional panels are looking into the handling of the IPO amid accusations.
Negative information about the company was withheld from some investors.
The social network also facing multiple lawsuits.
Shareholders claim FaceBook and its big bank underwriters Morgan Stanley Goldman Sachs.
And JPMorgan Chase told only a few select investors they had downgraded the company's earnings outlook.
When you go public when you raise money in the market you are required to disclose material information -- -- are there.
Their entire reason for being there is to be independent from the company to make sure these facts are revealed to investors in the documents.
The lawyer says he's also planning to file a lawsuit against FaceBook on behalf of a client.
Here's a look at the company stock in its fifth day of trading after last week's -- debut on the NASDAQ.
Shares up about boat 2% after a 3% gain yesterday let's get -- to Jerry -- she anchors the Willis report on the Fox Business Network.
-- the lawsuits are piling up that it's not just FaceBook getting -- here.
That's right -- anybody is in the line of fire connected to FaceBook and that includes Morgan Stanley JPMorgan the big underwriters the NASDAQ itself.
Mark Zuckerberg the CEO of the company.
You know you mentioned one of the complaints is this idea that analysts put out reports that were shared with professional investors but not individual investors.
And now interesting today Mark Cuban the guy -- was like the original IPO billionaire.
He's saying that this is gonna cause individual investors to get out of the market let me tell you what he said exactly.
Say good -- to the individual investor on Wall Street -- positive impression they had the IPO market and -- stock market in general was just torched to the ground.
All confidence in the stock is destroyed.
-- goes on to say that he bought 150000 shares of FaceBook.
And that he thinks that the company's going to face big -- What what.
What do you make of these reports -- that FaceBook is considering moving its stock from the NASDAQ -- the New York Stock Exchange mean is it significant.
Well we're know what's gonna happen yet it's too early to tell but there are conversations going on -- you'd better believe that the New York Stock Exchange sees this as a big opportunity.
I mean think about -- the companies that are likely to go public.
Internet IP -- Twitter networks -- service now.
The list goes on -- on -- a lot of money that to be had here.
At NASDAQ if they can if -- can retain its position.
As a place to go with Internet IPOs but that's said that's going to be tough for them to argue the -- he's gonna have a good argument here.
-- Now Gerri Willis with Fox Business -- Gerri good to see you thank you let's bring in Mike San toll he's associate editor of the financial magazine Barron's which is owned by the parent company.
Of this network and and Mike I mean you heard Jerry there what do you make of NASDAQ did they messed this thing up.
Only I think -- nasdaq's own admission they really did -- the the whole process in terms of opening up the stock to trade on time they couldn't seemingly handle.
I just his sheer volume of data traffic for the buy and sell orders and not you know clearly added another layer.
Kind of difficulty or incompetence however you want to put it.
Into this process that -- -- -- had some problems each step along the way so.
Yes definitely NASDAQ has already apologized for what for its role now whether the New York would have necessarily had a seamless opening we don't know but it certainly doesn't hurt for them to say so at this point.
I know the banks are getting a lot of blame in this as well -- the the banks are saying look if anybody didn't you know people wanted to get on the gold rush ride -- -- they wanted to be involved involved in the glamour of this thing but if they'd look at the financial statements of FaceBook they would have real lies.
That this stock was overvalued.
It worked out overvalued and then everything you were supposed to base and investing decision not.
What's supposed to be in that document whether you had heard whispers or rumors or or other information or not you know I reminds me.
Jury instructions when the judge says you know we know that there was other testimony but is supposed to disregard that just pay attention to what I tell you is important making a decision.
That's kind of impractical.
In real life but that is kind of what you're supposed to do as investor.
Yeah but you know FaceBook what do you make -- the changes because you know FaceBook was considering selling a certain number shared that that by 25%.
They were talking about a range from I think it was 24 to 32 bucks and it went from 34 to 38 dollars.
Did that make an impact on this overall.
No doubt about -- -- debut.
It was it was definitely in retrospect especially too much stock -- too late -- -- higher priced.
At a point when people thought there was sufficient demand to -- -- that up but in reality in a weak market and we had all these other troubles surrounding you know clearly the price is set too -- but you know if it's more art than people give -- credit for terms of setting the right price.
Keep in mind is a stock that on the private market be sort of electronic exchanges.
For private shares had traded at forty dollars and above so wasn't outlandish to -- 38 just in retrospect we know it was simply not enough buying interest.
To absorb all that in this mark and I gotta go -- to give me the bottom line on on FaceBook where does it go from here what's interesting right now would you have a healthy give and take about the true.
Future prospect evaluation of this company and the markets operating -- -- -- well right here having the stock bounce a little bit even below its IPO price but having it bounce right now announces -- regular stock.
In the rest of it's going to be decided in the legal circles.
A regular stuck the associate editor of Barron's Mike -- -- Mike good to see you thank you Sarah pledged tax.