Facebook is now acknowledging what went wrong on IPO day after its lackluster stock market debut. Their fingers are pointed at the Nasdaq Stock Exchange. Facebook reveals that Nasdaq's software crash caused a huge mess of its IPO.

The 30 minute delay on May 18 tech glitch caused many traders reported with trouble to cancel orders and trading, at times on the platform. The motion reveals how some investors are suing Nasdaq in six class action cases, alleging that Nasdaq caused a lot of uncertainty and investor losses.

“As has been widely reported in the press, the commencement of trading in Facebook shares was delayed as a result of problems with Nasdaq’s software systems, which impaired the orderly execution of trades and price levels,” the motion states.

Facebook mentions press reports that stated “investors suddenly were turning against Facebook” as a direct result of the technical difficulties. Nasdaq apologized for its errors, and Facebook believes that these reports further their stock price.

“Commentators have stated that Nasdaq’s announcement caused a rash of stock sales that again drove down the price of Facebook shares,” the motion states.

Facebook and its lead underwriters Morgan Stanley, J.P. Morgan and Goldman Sachs filed the motion in Federal District Court to consolidate 40+ shareholder lawsuits, according to the initial The New York Times report.

According to the motion, Facebook shareholders are suing the company, its directors and underwriters “to challenge certain disclosures in advance of Facebook’s IPO.” Individuals allege Facebook misinformed them about risk factors pertaining to the giant social network.

Facebook alleges it followed “customary practice.” and states the company did disclose a trend that could hurt its stock forecast and that it made an ammendment to its S-1 filing for its IPO on May 9.

“The May 9 Amendment ascribed that trend to the increased usage of Facebook on mobile devices, in which display advertising was limited at the time, as well as certain product changes that affected the volume of advertising that could be displayed,” the motion states. “As is customary, and like the original S-1, the May 9
Amendment did not include forward-looking projections.”

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