A federal judge in the US has certified two shareholder class actions accusing Facebook of hiding concerns about its growth forecasts prior to the social media company's May 2012 initial public offering. US District Judge Robert Sweet in Manhattan said retail and institutional investors who claimed to lose money from buying Facebook shares at inflated prices in connection with the IPO may pursue their respective claims as groups, Reuters reports. Facebook is appealing the class certifications, which the company said are "without merit" and conflict with "well-settled" precedent.
Shareholders accused Facebook of concealing internal projections prior to its IPO of how growth in mobile devices, an area in which it generated little ad revenue, might hurt its prospects, even as it quietly warned underwriters to cut their forecasts. Facebook made its stock market debut on 18 May 2012 at USD 38 per share. Its share price fell to USD 17.55 in September 2012 and stayed below the IPO price for more than a year. The stock ultimately rebounded and is now worth over USD 100 per share.
