David Barbash, Posternak Blankstein and Lund, on Investors Suing Facebook
Thu, 24 May 2012|
Facebook's troubles continue as investors are looking for answers. David Barbash from the law firm Posternak Blankstein and Lund fills us in.
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Automatically Generated Transcript (may not be 100% accurate)
-- it's gonna open up enough ten minutes and -- positive territory looking good look at. Yes Dow up 44 S&P up one it will take that NASDAQ up six. We'll trading at 75 cents and pulled up 1810. Ten year treasury one point 76. There -- so that the poll question text question how do you feel about. Morgan Stanley or maybe Goldman Sachs JPMorgan coming in 9919. Techsters saying hey Barry can you explain propping up -- -- -- I really don't understand what that means while what it means is when the stock goes public. The underwriters the lead underwriter is allowed to go in and buy additional shares so -- to stop the stock from falling precipitously and that's what happened at FaceBook shares. When it opened. It it went up to as high as 45 dollars a share on Friday. And rapidly dropped down to thirty dollars a share and it was acknowledged that Morgan Stanley wasn't back buying shares at 38 who wouldn't go below it it closed about thirty dollars a share however on Monday. The share price continued to decline. And might what I'm trying to find out what I've been unable to learn thus far is. Whether or not Morgan Stanley is in fact continuing to prop up the stock price I suspect they are a safety net sort of kinda. Yes well -- soon as it -- a certain price they buy shares. And I suspect they are because yesterday I saw the share price it would never go below 31 dollars this year it would drop out -- -- below 31 let me to believe. That Morgan Stanley was putting in massive orders to prop up your own house -- just by speculation I don't know that for a fact. When I'm hoping is that our next guest might know his name is David Barbara she's a partner in the corporate department of Pasternak like -- and Lund. David welcome to the show thank you. Good morning hey this IPO of FaceBook is turning into a huge. Problem and secretary of state William Galvin. Is evidently. Doing some kind of an inquiry can you tell us the basis of his inquiry please. The basis of my understanding of his inquiry is basically. Whether or not. Analysts at Morgan Stanley provided certain of its larger institutional investors. Information about -- FaceBook that was not. Publicly known to our investors basically. I think. Cut and -- it galloping is saying you know. You'd -- treating investors differently. Yup yup and I think there's evidence to that effect does that not mean we we know for a fact that one of their. Senior analysts was telling they're big clients don't buy the shares. Well I think that's what's being reported that there is evidence that went there and analysts did have those conversations. What -- set in and. In the contacts in into whom you know then again it's still very early in the case and I think. What Turkish speak out and do is get -- is get an apartment and Christine and exactly. And so being. It's early a little early in exactly you point the finger at the -- in the folks now. Too much of the lawsuit that Taiwan were based in part on the report in Reuters. That. War. -- in the police found. To be at fault and then you really need to get all the facts and that's what apps artistic Japanese is. All right now but my understanding that correctly from wrong here in the securities division department. On I thought that there had to be quiet period of forty days from the IPO. We couldn't -- weren't allowed to talk about the financials. Of that company I thought that they would have to wait until the end of June before they were able to say yeah revenues are gonna mr. reddy's are better. What what happened -- -- Well I think I think it what I've what I understand in and what I've what I've experienced. What I wrote it. Couldn't we during that. The road shall period that typically don't. Have these types of conversation you know but. In it and before the IPO. Was finalized. In in on May ninth. FaceBook did. Violent an amendment to its perspectives -- gave him. Raised the issue of -- it's. Being able to -- -- revenue. And I think that's what we're in the -- two things that. App public information that they were -- -- Greek whose whose reputation is most at risk here's -- Morgan Stanley's or is that Facebook's. I think probably combination. I think. That with respect -- -- and we. This goes the whole question in and concern that people have generally about Wall Street and in light of what happened -- few weeks ago with JPMorgan. And now this coming so light and and again whether true or not that's still to be determined but it it does I think in in the public -- -- some new concern again have have we seen this before Wall Street doing exactly what it was doing. Can't be trusted which is unfortunate but. I think that. Part -- -- -- -- and then I think the FaceBook you know again I think. Being tenor of this and being as tight and IPO the wise I think. Where everyone now questioning FaceBook. I think though from from my perspective -- is I think. What people should be looking FaceBook is you know it did it -- Viable companies. From a financial standpoint and and you know that is there a long term. Opportunity here. Do you know David if the stocks being propped up or not don't know and you know the cut. What about the shorting activity today's the First Lady in short the stock we expect there. I think to expand its -- A possibility I think people certainly. What to do it but I I don't have any intent on well. All right well David I appreciate your time and I'm sure gonna have to have -- back -- this sounds like it's gonna be long gated litigation is that fair assumption. I think that's right I think I think that is is in Iraq and I would also acting for those companies out there are many. My client. Think the message that the last meeting shows is as you -- between about. IPO can be prepared -- that you're gonna be scrutinized in Spain do. Is open to the public and you need to be prepared. -- in this type of scrutiny. All right well David thanks a lot for your time -- year.
