With the third day on the books, Facebook’s stock is down even further than yesterday, to $31.12, well below the $38 IPO price. Friday’s glitches caused massive confusion and has even led to a lawsuit against the Nasdaq, which has seen its reputation tarnished. Now Morgan Stanley is also getting the side-eye because the financial firm, the lead underwriter on the initial public offering, unexpectedly cut Facebook’s revenue forecast.
The way the change was made — so close to the IPO and during the “road show” — is strange, say those in the know. If that information wasn’t disclosed properly to Morgan Stanley, there could be violations. Now the Securities Exchange Commission and the Financial Industry Regulatory Authority (FINRA) are nosing around, seeking a review.