Newswise — “Whether or not the Facebook prospectus was materially misleading is an open question for the plaintiffs to prove. What's not a question is the fact that institutional investors, as part of the sales process, regularly receive information — like the change in projections alleged here — not available to the general public. That may not be such a big deal. After all, most mom-and-pop investors won't fully comprehend the projections in the first place.
“What's more troubling is the signal that the change in projections sent to the institutional market: Namely, that price support for the IPO was likely to be weak and so $38 per share was unlikely to be sustained. That is certainly the kind of information even mom and pop would have understood.”--Charles K. Whitehead, professor at the Cornell University School of Law and a former Wall Street attorney.
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