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Bank refund for Facebook investors
Morgan Stanley, the lead investment bank in Facebook's troubled initial public offering, will compensate retail investors who overpaid when they bought stock in the social network site's flotation, a person familiar with the matter said.
The source said the firm was reviewing orders its retail clients placed for Facebook stock and would make price adjustments if the clients paid too much. The person did not say what amount constituted overpaying.
Facebook's IPO (initial public offering) was highly anticipated. But technical problems on the Nasdaq Stock Market delayed the stock's open last Friday. The stock closed nearly flat on its first trading day at 38.23 dollars (£24.50).
Morgan Stanley and Facebook face at least two lawsuits over the IPO. Both actions claim analysts at the large underwriting investment banks cut their second-quarter and full-year forecasts for Facebook just before the IPO and told only a handful of clients.
Morgan Stanley has declined to comment on the lawsuits and Facebook described them as "without merit".
On Thursday Facebook's stock closed up 1.03 dollars, or 3.2%, at 33.03 dollars. This gives the company a market value of 90.4 billion dollars (£57.9 billion), down from 105 billion (£67.3 billion) at the end of trading last Friday.