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Scandal Brewing Over Facebook’s Actions At IPO

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According to Reuters, a scandal is brewing over Facebook’s actions in the hours before its IPO last Friday. Attention is focused on why underwriters revised their revenue forecasts down during the Facebook IPO roadshow, because this is a highly unusual move that casts a very negative light on Facebook. Other reports at Business Insider suggest that three underwriters who downgraded their revenue projections did so at the behest of a Facebook executive who had knowledge of weaker than expected Q2 performance. This information was then conveyed to selected institutional investors, in order that they may protect their income, but not broadcast to the entire investment community. Details are not forthcoming, and BI notes all parties have declined to comment. At the least this news is an uncomfortable PR matter at a critical moment, and at worst the SEC and FINRA may find Facebook guilty of financial misconduct.

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I'm covering the science/tech/generally-exciting-and-innovative beat for Fast Company. Follow me on Twitter, or Google+ and you'll hear tons of interesting stuff, I promise. I've also got a PhD, and worked in such roles as professional scientist and theater technician...thankfully avoiding jobs like bodyguard and chicken shed-cleaner (bonus points if you get that reference!)

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