Wednesday, May 23, 2012
Gavin O'Malley, May 23, 2012, 12:42 PM
Facebook's IPO Faces ScrutinyPCMag.com

Business fundamentals aside, Web watchers are now wondering whether Facebook can recover from its flubbed IPO.   

Facebook, its underwriters, including Morgan Stanley, and founder Mark Zuckerberg, are facing multiple lawsuits alleging that the company hid weakened growth forecasts ahead of its $16 billion public event.

“The highly publicized IPO is facing scrutiny from several quarters for possible irregularities that may have occurred before the stock was floated and continued through the first day of trading,” reports PCMag.com.

In one New York case, “shareholders said research analysts at several underwriters had lowered their business forecasts for Facebook during the IPO process, but that these changes were ‘selectively disclosed by defendants to certain preferred investors’ rather than to the public generally,” Reuters reports.

“The analysts cut their estimates because a Facebook executive who knew the business was weak told them to,” according to Business Insider’s Henry Blodget. “The information about the estimate cut was then verbally conveyed to sophisticated institutional investors who were considering buying Facebook stock, but not to smaller investors … At worst, it's a violation of securities laws.”

Meanwhile, SEC Chairman Mary Schapiro said Tuesday that her agency would examine "issues" surrounding the IPO, The Wall Street Journal reports.

WSJ also blames Facebook’s botched IPO a last-minute decision by CFO David Ebersman to increase the number of shares the company would offer investors by 25%. “That decision by the 41-year-old Facebook executive may have doomed any real chance the social-networking company had that its stock would jump on its first day of trading -- a hallmark of successful IPOs.”

“Increasing the size of the offering meant that typical buy-and-hold investment funds got more shares than they expected, so they were likely offloading their excess,” CNNMoney explains.

As such, “Facebook's stock continues to suck harder than a Northwestern University freshman on a 5-foot bong,” Gawker writes. “And the fallout from the most hyped IPO in history bursts not just the illusion that Facebook isactually worth $100 billion, but the idea that Facebook is different than any other corporation hell-bent on making as much money as possible for a handful of very wealthy people.”

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  • Gavin O'Malley, May 23, 2012, 1:01 PM
  • Oracle announced the acquisition of social marketing platform Vitrue. Financial terms of the deal were not disclosed, but sources tell TechCrunch that it cost the software giant $300 million. “As if Oracle didn’t offer enough products and services already, the acquisition will give it a strong Facebook marketing platform to offer its enterprise clients.” A bona fide business, Vitrue was on course for revenues of nearly $100 million this year, sources tell TechCrunch. Vitrue is reportedly “nearly profitable” and was projected to reach profitability in this fiscal year. Along with Facebook, Vitrue helps marketers manage their brands on Twitter, YouTube, Pinterest, Instagram, and other social platforms. The company is also recognized for its ability to rapidly integrate with new partners, including Klout. Also of note, Reggie Bradford, Vitrue CEO, is expected stay on, and continue to play a key role at what will now be one of many Oracle business units.   Read the whole story...
  • Apple maintained its position as the leader in mobile PC sales -- with 17.2 million units shipped during the first quarter of the year, according to research firm NPD. (That’s including iPad sales, which amounted to 13.6 million units moved during the quarter.) The company beat out its nearest competitor HP by a solid 8.3 million units, making it the leader by far, 9To5Mac notes. “As for the area of key growth, NDP backs up Tim Cook’s recent claims that China is a key emerging market.” In fact, according to NPD, China accounted overall for 13% of mobile PCs shipped during the quarter. (Overall, however, Samsung still leads in China by roughly 2.8 million devices shipped.) Apple already reported its second-quarter earnings, in which the company revealed shipping 11.8 million iPads. “It will be interesting to see how Apple fairs against the competition during Q2, but right now, it looks like the others don’t have a shot,” 9To5Mac adds. Apple also led in tablets shipped, with a 62% marketshare during the first quarter.   Read the whole story...
  • What about Bing’s highly touted visual search feature? Microsoft’s search engine scrapped that a while ago -- and without anyone realizing it. “The fact that almost no one noticed might be one reason why Bing has dropped its Visual Search feature … something that apparently happened months ago,” Search Engine Land write. “To be clear, this isn’t traditional image search that we’re talking about; that’s still available at bing.com/images.” Rather, Bing’s “Visual Search” tool-cum-interface debuted in 2009, and used Silverlight technology to let searchers view a large set of images and data. A Microsoft spokesperson confirmed that company began removing Visual Search galleries last fall -- “a long time for something to be shut down with virtually no one noticing,” SEL adds. “Last fall, we began the process of removing Visual Search galleries on Bing. Like all of our betas, Visual Search was part of an on-going effort to better understand how we can offer the best search experience possible,” a Microsoft spokesperson told LiveSide.net.   Read the whole story...