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Investors Files Class Action Lawsuit Against Facebook

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    NEWSLETTERS

    Facebook's less than stellar public debut has some investors banding together to sue the Menlo Park-based company and its underwriters.

    A class-action lawsuit was filed Wednesday against Facebook, Mark Zuckerberg, Goldman Sachs, JP Morgan Securities, Morgan Stanley and several other Wall Street banks that underwrote the social-network's initial public offering last week.

    The suit alleges that the underwriters misled shareholders about revenue projections.

    Facebook said it plans to fight the suit.

    "We believe the lawsuit is without merit and will defend ourselves vigorously," a Facebook spokesperson said Wednesday.

    Facebook's stock opened at $38 last Friday but less than week later it was hovering around $32 a share.

    The lawsuit alleges that Facebook and its underwriters failed to disclose that the company's revenue was not as strong as projected, in part because more users were using mobile apps to log in to the social network than on a traditional computer.

    The filing also charges that Facebook to lead underwriters to reduce the company's 2012 estimates but that information was only shared with select investors.