4:26 pm June 16, 2012, by Christopher Seward
In its first major response to dozens of lawsuits filed over its much-maligned initial public offering, Facebook is asking the federal court in Manhattan to group the suits together.
According to a Reuters report, consolidating suits filed by angry investors who lost millions when the stock began trading May 18 may help the world’s largest social network site reduce its distractions and focus on building confidence in its future. The company has lost billions in value over the last month.
In the first major executive fallout, Facebook announced Friday that Bret Taylor, who oversees the company’s main platform and mobile business, is leaving before the leaves change. He’s reportedly told Facebook founder Mark Zuckerberg that he’s always wanted to start his own business.
Wall Street on Friday seemed to welcome signals from Facebook that it is trying to deal with the IPO fallout. The company’s stock ended the week up 6 percent at $30.01, though still a long way from its initial price of $38.
Facebook, the lead underwriters for its IPO, which include Morgan Stanley , Goldman Sachs and JPMorgan Chase, and Nasdaq, the exchange that trades its stock under the symbol FB, have been sued by investors who claim Facebook was not forthcoming about its growth prospects and that Nasdaq computer problems caused them to lose millions.
The social network site and underwriters want the suits grouped, and Facebook is clearly placing the blame on Nasdaq. In its court filings, according to Reuters, Facebook said “technical problems and other trading-related errors affecting Facebook’s stock – which Nasdaq subsequently admitted – created market uncertainty and caused investor losses.”
Nasdaq is considering ways to compensate investors who may have lost money due to the exchange’s trading problems.
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