Facebook may make an about face, leave Nasdaq

The Facebook fallout continues.

Congressional panels are examining concerns about last Friday’s initial public offering of the social network company. And Facebook reportedly is in talks to switch from Nasdaq to the New York Stock Exchange.

Two congressional committees are looking into the troubled initial public offering of Facebook Inc., aides said Wednesday.

Meanwhile, Facebook is in talks with the New York Stock Exchange to move its stock from the Nasdaq Stock Market after the initial public offering was botched on Friday, according to a person familiar with the matter.

The person spoke on the condition of anonymity because they were not authorized to speak publicly. Facebook’s much-anticipated IPO was delayed by a half-hour on Friday because of glitches on the Nasdaq.

After pricing at $38, Facebook’s stock closed up 23 cents on Friday and has been down since. On Wednesday, it closed up $1, at $32, still down nearly 16 percent from the IPO price.

The news was reported earlier by Reuters.

NYSE declined to comment. A Nasdaq spokesman did not immediately return a call for comment.

The Senate Banking Committee and House Financial Services Committee are both conducting preliminary inquiries, though neither has started a formal investigation or set hearings to specifically address concerns raised about the IPO, the aides said.

“Effective capital markets require transparency and accountability, not one set of rules for insiders and another for the rest of us,” said Sen. Sherrod Brown, D-Ohio, chairman of the Senate Banking subcommittee on financial institutions and consumer protection.

Brown said the Securities and Exchange Commission “must fully investigate and take appropriate action if it discovers any violations.”

SEC Chairwoman Mary Schapiro said Tuesday that there were issues related to the Facebook IPO that the agency needed to look in to.

Her comments came amid reports that Morgan Stanley &Co., the lead underwriter of one of the most eagerly anticipated IPOs ever, had informed some favored clients before Friday’s offering that the bank was cutting its revenue estimates for Facebook.

The Senate Banking Committee wants to learn more about issues raised in news reports about Facebook’s IPO and staff are receiving briefings from Facebook, regulators and other stakeholders, said a committee aide, who was not authorized to speak publicly.

Staff at the House Financial Services Committee also are gathering information about Facebook’s IPO, said Marisol Garibay, the committee’s communications director.

“While no hearings specifically focused on this IPO are planned at this time, the committee will have hearings over the coming weeks where this topic is likely to be raised,” she said.

Brown said the problems in Facebook’s IPO highlighted his concerns about the recently enacted Jump-Start Our Business Start-Ups Act, known as the JOBS Act.

The legislation, which had strong bipartisan support and was signed by President Obama in April, was designed to make it easier for small businesses to get access to investment capital. But opponents warned that the bill would weaken regulatory oversight of stock offerings.

“The conduct in this highly publicized IPO only reinforces that the Senate was mistaken in voting to remove oversight from approximately 98 percent of all IPOs for companies making less than $1 billion per year,” Brown said.

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(c)2012 the Los Angeles Times

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Distributed by MCT Information Services

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