Shareholder Sues Facebook After Stock Plunge (reuters.com)

An anonymous reader quotes a report from Reuters: Facebook and its chief executive Mark Zuckerberg were sued on Friday in what could be the first of many lawsuits over a disappointing earnings announcement by the social media company that wiped out about $120 billion of shareholder wealth. The complaint filed by shareholder James Kacouris in Manhattan federal court accused Facebook, Zuckerberg and Chief Financial Officer David Wehner of making misleading statements about or failing to disclose slowing revenue growth, falling operating margins, and declines in active users. Kacouris said the marketplace was "shocked" when "the truth" began to emerge on Wednesday from the Menlo Park, California-based company. He said the 19 percent plunge in Facebook shares the next day stemmed from federal securities law violations by the defendants. The lawsuit seeks class-action status and unspecified damages.

Comments

Re:Suing your own company.

[Calydor]

If you have shares in a company for 1 million dollars, and those shares are 1% of the company's worth, the company is worth 100 million.

If you sue the company for 10 million dollars they lose 10% of their value and are now worth 90 million. Your 1% shares are now only worth 900,000 dollars, right?

But you just got 10 million dollars. Who cares about the shares at that point.