James Gorman, Morgan Stanley chief executive, has defended his bank’s performance as lead underwriter on Facebook’s public offering, despite waves of criticism from investors and a potential legal review of the deal’s marketing.
Mr Gorman, in comments to Morgan Stanley employees, advised them to be ”proud of the job your colleagues did” and urged them not to judge the quality of the deal “based upon what happened over a couple of days”.
Mr Gorman is set to appear on CNBC television on Thursday morning, when he is expected to address the deal publicly for the first time.
“There are so many lawsuits now, and it’s gone viral, that [Mr Gorman] has to say something,” said Scott Sweet, senior managing partner at IPO Boutique, an investor advisory firm.
Facebook’s poor trading performance since its IPO two weeks ago, exacerbated by a software trading glitch on Nasdaq the day it listed, together with scepticism about its business model, have tarnished what was meant to be a historic debut.
Facebook shares fell a further 2.3 percent to $28.19 on Wednesday, a fresh low since trading began on May 18. They were sold to investors at $38, valuing the social network at $104 billion, compared to Wednesday’s $77.2 billion.Page 1 of 4 | Next Page