BUSINESS

Facebook stock climbs after rocky start with IPO, company faces shareholder lawsuit

05/23/2012 12:40 EDT | Updated 07/23/2012 05:12 EDT
NEW YORK, N.Y. - Facebook's stock is climbing higher, a reprieve for shareholders after the stock's rocky inaugural trading day Friday was followed by a two-day decline.

Facebook Inc.'s stock is up US$1.03, or 3.3 per cent, to US$32.03.

That's still nearly 16 per cent below the initial public offering price of $38. Meanwhile, a group of shareholders have filed a lawsuit against Facebook, its executives and Morgan Stanley, the IPO's lead underwriter.

The suit, filed in U.S. District Court in New York, claims the company's IPO documents contained untrue statements and omitted important facts, such as a "severe reduction in revenue growth" that Facebook was experiencing at the time of the offering.

The suit's three plaintiffs claim they were damaged.

In a statement, Facebook said the lawsuit is without merit. Morgan Stanley declined to comment.