Hoodiewinked? Oh, Please
It didn’t take long for the parasitic plaintiffs’ bar and its on-call cast of purportedly hapless investor “clients” to welcome hoodie-wearing Mark Zuckerberg and Facebook to the hazardously litigious world of publicly traded companies, did it? The social networking giant’s initial public offering of (plainly overvalued) stock had barely concluded before securities sharks swam to the courthouses, claiming their just-fell-off-the-turnip-truck clients had been hoodiewinked.
The number of shareholder class actions targeting Facebook and/or the investment banks that facilitated the IPO is multiplying faster than the Andromeda Strain, but what they all commonly allege is essentially this: Facebook executives and the company’s underwriters kept from would-be retail buyers of the stock key information about shrinking revenues and business model problems.
Yet even a casual consumer of financial news knew days before the IPO, for example, that General Motors had ceased advertising with Facebook (“GM Says Facebook Ads Don’t Pay Off,” Wall Street Journal, May 16, 2012). And only an imbecile would have considered paying $38 for a share of a company that many experts had valued in the single digits, based on P/E ratio and realistic expectations for future growth.
There was a time not too long ago in America, arguably a much better time, when folks who stupidly squandered their money on this pie-in-the-sky promise or that would humbly regret their misjudgment and quietly hope the neighbors didn’t find out. Nowadays, folks rush to lawyer up and be the first to declare their idiocy to the world with a lawsuit, shamelessly hoping to get rich without having to work hard or conceive a better mousetrap.
With “friends” like that, Zuck, who needs enemies, huh?