Home / Front Page/ Facebook sued after $ 120 b stock plunge ‘shocked’ market

Facebook sued after $ 120 b stock plunge ‘shocked’ market


Comments / {{hitsCtrl.values.hits}} Views / Tuesday, 31 July 2018 00:18

Facebook

NEW YORK (Reuters): Facebook Inc. (FB.O) and Chief Executive Mark Zuckerberg were sued on Friday in what could be the first of many lawsuits over a disappointing earnings announcement by the social media company that wiped out about $ 120 billion of shareholder wealth.

The complaint filed by shareholder James Kacouris in Manhattan federal court accused Facebook, Zuckerberg and Chief Financial Officer David Wehner of making misleading statements about or failing to disclose slowing revenue growth, falling operating margins, and declines in active users.

Kacouris said the marketplace was “shocked” when “the truth” began to emerge last Wednesday from the Menlo Park, California-based company. He said the 19% plunge in Facebook shares the next day stemmed from federal securities law violations by the defendants.

The lawsuit seeks class-action status and unspecified damages. A Facebook spokeswoman declined to comment.

Shareholders often sue companies in the United States after unexpected stock price declines, especially if the loss of wealth is large.

Facebook has faced dozens of lawsuits over its handling of user data in a scandal also concerning the UK firm Cambridge Analytica. Many have been consolidated in the federal court in San Francisco.

Thursday’s plunge also hit Zuckerberg’s bottom line.

Zuckerberg had been tied with Warren Buffett as the world’s fourth-richest person, but the Berkshire Hathaway Inc. (BRKa.N) Chairman’s current $ 83 billion fortune tops Zuckerberg’s $ 66 billion, Forbes magazine said.

Buffett now ranks third among the world’s billionaires, while Zuckerberg is sixth.

Facebook shares fell another 0.8% on Friday, closing at $ 174.89 on the Nasdaq.

The case is Kacouris v. Facebook Inc. et al, US District Court, Southern District of New York, No. 18-06765.

 


Share This Article

Facebook Twitter


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Religion is a problem in Sri Lanka; can it be a solution?

Saturday, 17 August 2019

Generally, it is expected that religion should be a solution to a problem. Ironically in Sri Lanka religion is the problem. Therefore, what would be the solution? When religion becomes a problem of a country....


Orthodoxy and change: A perennial Muslim issue

Saturday, 17 August 2019

Whether Muslims live as minorities in non-Muslim countries or as majorities in a total of fifty seven countries, the clash of orthodoxy with modern challenges is a perennial issue that bedevils progress on several fronts in these communities.


Making the MCC Compact work for Sri Lanka

Friday, 16 August 2019

It is a sign of these political times that even an apolitical issue like a foreign aid program becomes a hot topic in Sri Lanka. In April 2019, the Board of Directors of the Millennium Challenge Corporation (MCC) approved a compact program for Sri La


Sri Lanka needs a president hungry for success, not power

Friday, 16 August 2019

The late John F. Kennedy described politics as a “noble adventure, an adventure in which one joins hands with the masses for the service of man”. Not that the Kennedys didn’t play “politricks” in their heyday. But playing “politricks” w


Columnists More

Special Report

SPECIAL REPORT MORE