Shut Fox Down

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Transcript by Newsy: http://www.youtube.com/user/NewsyBusiness?feature=guide (Image source: Flickr/deneyterrio) BY CHRISTINA HARTMAN It's not just bleeding — it's hemorrhaging in the business press over the downward slide of Facebook's shares. ITV: "Facebook have continued their slide down by nearly 9% today." Fox Business: "This is a textbook case of a broken IPO. ... FB should be FK for falling knife." Sky News: "...has now sunk by more than 18 percent in just three days of trading." Reporters and analysts have been scrambling to piece together just what happened with the pricing of Facebook's initial public offering. Al Jazeera: "Morgan Stanley is being investigated over claims it informed some investors that the revenue estimates for the social network had been cut before Facebook's IPO last week." CBS: "...an analyst reportedly Scott Dewitt, sent out a cautionary note that Facebook's outlook was weakening but only to a select group of the bank's top clients." Morgan Stanley — the lead underwriter on the deal — says it followed all the same procedures it does for all IPOS. But Reuters reports the bank told clients its internet analyst had lowered his revenue forecasts for the company. On top of that — Business Insider reports — albeit acknowledging the information is unconfirmed — that Facebook itself downgraded its own prospects. "...we have now heard from one source that ... one of the underwriter's analysts has said he was told by a Facebook financial executive to cut his estimates." Leading the Insider's Henry Blodgett to conclude... "In one of the biggest IPOs in history, in which a huge amount of stock was sold to small investors, privileged Wall Street insiders once again got top-notch information...and individuals got the shaft." Still others blame Morgan Stanley for botching the IPO, and allege it sold the public too many shares. Meanwhile though, Bloomberg's Jonathan Weil has had enough of what he calls Facebook's "whiny" investors. "Nobody forced anyone to buy Facebook shares. Blaming the company's underwriters for the stock's plunge is like losing money at a casino and then waiting until afterward to complain about the house's odds." Still — allegations the banks shared information with some and not all investors could put the IPO under regulatory scrutiny. Both the Securities and Exchange Commission as well as the Financial Industry Regulatory Authority are considering looking into Facebook's process.