Morgan Stanley (NYSE:MS), the lead underwriter of Facebook’s (NASDAQ:FB) IPO, will compensate retail investors for their losses from having overpaid for the stock in Friday’s IPO, according to an Associated Press report.
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The firm is reportedly reviewing orders its retail clients placed for Facebook stock, and will make price adjustments for clients determined to have paid too much, according to a source familiar with the matter.The person didn’t give details on what would constitute overpaying.
Technical problems on the Nasdaq Stock Market delayed the stock’s open last Friday. It closed its first day of public trading at $38.23, only slightly above its $38 IPO price.
Morgan Stanley and Facebook have both been named in two lawsuits over the IPO, each of which alleges that analysts at the large underwriting investment banks cut their second-quarter and full-year forecasts for Facebook just before the IPO, and only notified select clients of their lowered expectations.