TriCom Technical Services

Did you buy stock in Facebook?

In Facebook, Goldman Sachs, investors, IPO, JP Morgan, Morgan Stanley, share, stocks, sued on May 23, 2012 at 11:12 am

If you did, you may be able to get in on a lawsuit.

Facebook Inc. and its underwriters are being sued by investors over the public share offering due to a second day loss of 18% below the original offer price of $38 per share.

According to Business Insider, it turns out that “Facebook’s lead underwriters Morgan Stanley, JP Morgan, and Goldman Sachs, all cut their earnings forecasts for the company in the middle of the IPO roadshow.”

To add insult to injury, information regarding the new lower estimate was only passed on to a handful of big investor clients, not everyone else who was considering an investment in Facebook.

Which means, Facebook’s IPO was never worth the reported $16 billion the company had set its sight on, valuing the incorporate at a total of $104 billion.

So what is Facebook actually worth? Today, it is trading for $31.95 a share, making its 421.2 million shares worth approximately $13.5 billion – still not too shabby, considering. That said, the stock’s value could slide further, putting it below the $30 mark.

To take a stab at what the stock’s worth might actually be, Business Insider estimates a fair Facebook IPO worth to be $16-$24 – an average of nearly half the original sales price.

No wonder investors are suing.

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  1. How much Facebook is worth: Facebook’s ( FB ) market capitalization will hover around $81 billion on the day of its IPO.

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