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Wednesday, May 23, 2012

Facebook IPO Scrutinized By The SEC; Did Feds Force Zuckerberg To Go Public?

Did Feds Force Zuckerberg To Go Public?

Facebook's IPO Offering was NOT about making Money because Zuckerberg was already Uber wealthy & Facebook's bottom line was also doing quite well.

Facebook went public because the Feds forced it to go Public or pay Higher Taxes because it was becoming TOO Big of a Communications Tool.

Billions of people from all over the World were plugged into Facebook's Wonderful maze of Friendship.

The Social Media Giant was continuing to grow, adding millions more Friends to the site each month.

i.e., Facebook was becoming Too Large for the Feds keep track of.

Apparently its ok for Banks to be Big but NOT a Social Media network.

Thus Going Public & Falling Short of Financial Expectations was the ONLY way to STOP Facebook's Growth.

Regulators eye Morgan Stanley's pre-Facebook IPO actions

Regulators are looking into a report that Morgan Stanley, the lead underwriter for Facebook's initial public offering last week, shared a negative assessment of the social network with major clients ahead of the IPO.

The comments from Rick Ketchum, head of the Financial Industry Regulatory Authority, an independent regulatory body, came after an article from Reuters said that a Morgan Stanley analyst reduced his revenue projections for Facebook (FB) shortly before the offering and shared this with institutional investors.

The report has raised questions about whether certain investors received privileged information ahead of the offering that should have been disseminated more widely.
"If true, the allegations are a matter of regulatory concern to FINRA and the [Securities and Exchange Commission]," Ketchum said in a statement via a spokeswoman.

An SEC spokesman declined to comment, though Reuters reported that agency chairwoman Mary Schapiro told reporters Tuesday that there are "issues that we need to look at specifically with respect to Facebook."

In addition, the news agency said, the Massachusetts Secretary of the Commonwealth has issued a subpoena to Morgan Stanley (MS, Fortune 500).

Officials from the secretary's office did not respond to requests for comments.

The news is the latest headache for Facebook and its underwriters following the company's debut on the Nasdaq Friday. Shares have since slumped 18% from the offering price of $38 amid criticisms that the company is overvalued.

Morgan Stanley's analyst reduced his revenue projection for Facebook shortly after the tech giant filed amended documents with the SEC saying that it could struggle to maintain revenue growth as users flock to mobile devices, Reuters said. It was not clear whether this revised projection was shared with all clients or only a select group.

In a statement, Morgan Stanley rejected any suggestion of impropriety, saying it followed "the same procedures for the Facebook offering that it follows for all IPOs."

In response to Facebook's amended SEC filing, "a significant number of research analysts ... reduced their earnings views to reflect their estimate of the impact of the new information," Morgan Stanley said. "These revised views were taken into account in the pricing of the IPO."

Facebook did not immediately respond to a request for comment.

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Sources: CBS News, CNN

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