Russia’s Popular Social Network Delays IPO Citing Destroyed Investor Faith After Dim Facebook Inc (NASDAQ:FB) IPO
Facebook Inc (NASDAQ:FB) had another worst trade yesterday but still investors believed the weak stock as an attractive buying opportunity, placing it among the stock having largest inflow of money. FB recorded the highest total money flow resulting $8.69 million in net inflow of money after subtracting $283.76 million outflow or tick down from inflow or tick up of $292.45 million.
On the other side after the FB’s botched IPO, one of Russia’s most-popular social networks, VKontakte, has delayed its initial public offering for an indefinite period. VKontakte founder Pavel Durov wrote in his Twitter page that the world’s largest social network IPO has destroyed the faith of many private investors so VK’s IPO is postponed for an unspecified time. Durov has 12 percent stake in VKontakte and has a voting right to using the shares of Russia’s Mail.ru Group, VK’s biggest investor with a 39.99 percent holding.
Claims about the information available to investors have provoked a US federal search into whether particular traders received restricted information before the IPO that should have been shared more widely. New York magazine said that a lawsuit by investors alleges Goldman Sachs Group, Inc. (NYSE:GS) and lead underwriter JPMorgan Chase & Co. (NYSE:JPM) analysts alerted clients of Facebook’s lower growth estimates in the days ahead of its IPO.
SME Times India reported that a Delhi court yesterday dismissed the application of Facebook India asking removal of its name from a civil suit against different social networking sites for allegedly displaying objectionable content. Facebook India’s request that it was not responsible for the content appearing on website “facebook.com” got rejected by the Administrative Civil Judge Parveen Singh.
Judge Singh said that perhaps the defendant no.1 (Facebook India) was lifting revenue for the facebook.com by looking for advertisers from India for facebook.com. Thus, he found that on the grounds as claimed in the plea and argued by the counsel for the defendant no.1, the defendant no.1 cannot be excluded from the case at this stage. The court said that as a result the application is dismissed.
Mufti Aijaz Arshad Qasmi, an Islamic researcher linked to a website run by the Islamic Peace Foundation of India, was the one who moved petition seeking the removal of allegedly objectionable content from various websites. The court observed during argument that Facebook India failed to provide any point explaining the connection of its company with Facebook Inc. (USA).