The second-biggest IPO ever seen, Facebook (News - Alert), brought with it plenty of drama and a few lawsuits, but for the folks at Facebook, things have just turned a little brighter as one of the lawsuits attached to the IPO has been dismissed in a federal court.
The suit--which was actually, according to reports, a set of suits bundled into one--was brought by investors who bought early, and as a result, watched their share prices plummet from the IPO's opening price to well below half their value. Reports indicate that the investors were targeting Facebook over what was referred to as Facebook's failure to disclose internal financial forecasts, and was in turn required to disclose those projections with regulatory filings.
The federal judge involved in the case, operating out of Manhattan, ruled against the investors who, according to the judge hadn't established "actual corporate wrong," and also didn't show the necessary legal standing for the suit as they weren't Facebook shareholders when the wrongdoing they alleged took place. Additionally, the company had already made several warnings related to challenges in their mobile business.
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However, things aren't all clear for Facebook yet, by some reports. The judge in the case reportedly gave plaintiffs the option to revise the lawsuits and re-file them, and the possibility of appeal may come into play as one of the law firms involved is still reviewing the ruling. There are also several others that are still outstanding, weighing down the overall environment and casting doubt on a company that already has its share of doubt on it. The recent earnings announcement looked surprisingly good, but even a good earnings report wasn't enough to keep the share price up.
Facebook isn't out of the woods yet, but clearing this particular hurdle successfully is a step in the right direction. Facebook has also been spotted making some exciting new moves in terms of ventures, as well as some significant new advances in its mobile advertising concept.
There's a lot to like about what's going on in Facebook, and that means some very big advances that could come. If Facebook can get out from under the various lawsuits it's involved in that will likely serve as another indicator to concerned shareholders about Facebook's long-term viability as a publicly-traded firm.
Only time will tell just how well Facebook does against its various legal challengers, but this certainly shows great possibility down the line.
Edited by Brooke Neuman