Did Facebook mislead investors?

 Social media giant Facebook, based in Menlo Park, California, announced on Oct. 4 it now counted one billion users worldwide, up from 845 million at the year’s start. More than half of them, or 600 million, access Facebook through a mobile device, a number that grew 41 percent this year.

However a detailed report by Bloomberg suggests the company “hid” mobile issues from its prospectus documents and their lawyers actually “fought” with the SEC to keep some inconclusive information the IPO filings.

Facebook went forward, pricing the IPO at $38 a share. That was 107 times trailing 12-month earnings, making it more expensive than 99% of all firms in the Standard & Poor’s 500 index at the time. The SEC has no say in setting IPO prices.

Once called “the IPO of the century”, Facebook has dropped 45% up to and including last Friday. That is the worst offer-to-date performance of any US IPO raising at least $1.5bn since 2007, when MF Global Holdings went public.

Read the detailed report on Bloomberg

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