Did Zuckerberg Dump Facebook Shares Before IPO?
The gossip/Hollywood website TMZ is reporting Mark Zuckerberg, the founder of the world's #1 social media site, alledgely dumped nearly a billion dollars in shares.
TMZ reports he could be facing a potential lawsuit. TMZ did not list specific details or amounts, but said a group of Facebook employees are suing Zuckerberg, claiming he knew the original IPO of $38 was overpriced before they were made public, but failed to disclose it. The suit claims he quietly dumped nearly a billion dollars worth.
Some red flags were called by financial experts prior to the IPO but were largely ignored due to the fervor of one of the biggest public stock offerings in recent memory. Despite having over 900 million users, critics had pointed to the potential difficulty of Facebook monetizing those people. They said Google and other social-search sites charged more money for their ads, and actually are monetizing at higher percentages than Facebook.
According to a Reuters News/Ipsos poll, only one in 5 Facebook users have ever purchased a product because of ads or comments promoting products on Facebook; eMarketer claims the number of people who are now spending less time on the site has risen 34% since six months ago. According to TMZ, the lawsuit claims that such warnings were issued by JP Morgan, Goldman Sachs and other financial experts, but that information was disclosed to the largest investors.
The story did not include any comments from Zuckerberg or others involved in the company.