Facebook will face two class-action lawsuits after a federal judge said shareholders could pursue their case against the social network, which plaintiffs claim hid concerns about its growth forecasts ahead of its $16bn initial public offering.
The world’s largest social network cut its revenue forecasts in the middle of its IPO roadshow, ahead of the offering in May 2012, amid concerns that consumers were switching to using the site on mobile, where it was unclear if it could generate the same degree of growth from advertisements.
Mark Zuckerberg, Facebook chief executive, and Sheryl Sandberg, Facebook chief operating officer, are among the defendants at Facebook, being sued by two classes of investors — retail and institutional. The complaint was brought by three state and local retirement plans in the US, lead by the North Carolina state treasurer and five individual investors.