The lead investment bank for the initial public offering of Facebook, Morgan Stanley has announced it will compensate investors who had overpaid when they invested in last Friday’s IPO. A person close to the matter said Morgan Stanley was reviewing all retail orders for its clients that were placed for Facebook last Friday.
The company will make the necessary price adjustments if too much was paid by their customers. The person who was familiar with the decision by Morgan Stanley spoke only on the condition of anonymity since they had not been authorized to speak about the matter publically.
The amount that constituted an overpayment for the stock was not mentioned. The IPO for the social networking company was one of the most highly anticipated ever. However, a number of technical problems at the Nasdaq Stock Market on Friday caused a delay in the stock opening on Friday. After a first full day of trading, the stock closed close to flat at only $38.23.
Facebook and Morgan Stanley face a minimum of two lawsuits caused by the problems with the opening of the IPO. Both of the suits have alleged that analysts’ at large underwriting banks reduced the second quarter as well as full-year forecasts for the social networking company only minutes before the opening of the IPO and only notified a select group of clients.
No comment on the allegations has been made by Morgan Stanley, while the lawsuits have been called without merit by Facebook officials. At the close of Nasdaq on Thursday, Facebook stock was $33.03 or $1.03 up for the day. That would make the company worth $90 billion, down from Friday’s end of day trading of $105 billion.