Sat, May 26, 2012 - Page 10 News List

Morgan Stanley could refund some Facebook investors


Morgan Stanley chairman and chief executive officer James Gorman speaks during an interview in New York on Thursday.

Photo: Bloomberg

Morgan Stanley, the lead investment bank in Facebook’s troubled IPO, will compensate retail investors who overpaid when they bought Facebook’s stock in the company’s IPO on May 18, according to a source familiar with the matter.

The person said the firm is reviewing orders its retail clients placed for Facebook stock, and would make price adjustments if the clients paid too much. The person spoke on condition of anonymity because they were not authorized to discuss the matter publicly.

The person did not say what amount constituted overpaying for Facebook’s stock.

The social network’s IPO was highly anticipated, but technical problems on the NASDAQ delayed the stock’s opening and it closed nearly flat on its first day of trading at US$38.23.

Knight Capital said in a filing to the US Securities and Exchange Commission late on Wednesday that it had submitted a claim to NASDAQ over losses related to the computer problems. The New York-based broker asked NASDAQ to compensate it for up to US$35 million in losses, according to the filing.

Morgan Stanley and Facebook face at least two lawsuits over the IPO, both of which allege that 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. Facebook has said the lawsuits are “without merit.”

However, the company’s rocky IPO has not stopped life at the world’s biggest online social network. On Thursday, Facebook unveiled a camera app for the iPhone.

The app can be downloaded from Apple’s App Store and works like most other camera applications for smartphones. To take a photograph, you tap a camera icon in the upper left corner of your screen, aim and shoot. You can then add filters, crop or tilt your photo and share it on Facebook.

Facebook did not give details on when it might release a version of the app for cellphones that run on Google’s Android operating system.

In a statement, Facebook said it was “carefully looking at what might make for a good Facebook photos experience across Android devices.”

On Thursday, Facebook’s stock closed up US$1.03, or 3.2 percent, at US$33.03. This gives the company a market value of US$90.4 billion, down from US$105 billion at the end of trading on May 18.

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