Facebook says SEC's IPO probe ends, extending WhatsApp closing date

Fri Jul 25, 2014 3:55pm EDT

A woman holds a tablet displaying WhatsApp's logo in front of the screen with the Facebook logo in this photo illustration taken in Prague February 20, 2014.  REUTERS/David W Cerny

A woman holds a tablet displaying WhatsApp's logo in front of the screen with the Facebook logo in this photo illustration taken in Prague February 20, 2014.

Credit: Reuters/David W Cerny

(Reuters) - Facebook Inc said the U.S. Securities and Exchange Commission dropped its probe into the social networking company over events surrounding its controversial initial public offering.

In its quarterly report filed on Thursday, Facebook said the regulator in May "notified us that it had terminated its inquiry and that no enforcement action had been recommended by the SEC."

Facebook shares began trading on May 18, 2012, but soon fell below their $38 per share offering price and had lost more than half their value by the middle of August, angering investors.

The launch had been tarnished by technology problems that delayed trading and caused difficulty in processing trades.

Investors also complained they were not told just prior to the IPO that analysts at Facebook's investment banks were cutting their forecasts after learning of the company's internal projections for advertising revenue.

The end of the SEC probe does not affect shareholder litigation against Facebook, Chief Executive Mark Zuckerberg and many banks over the Menlo Park, California-based company's IPO. This litigation remains pending in Manhattan federal court.

Separately, Facebook said in the quarterly report it may extend by one year the date by which it is expected to close its $19 billion purchase of mobile messaging startup WhatsApp.

Facebook had agreed to pay a termination fee of $1 billion in cash and $1 billion in stock if the purchase did not close by Aug. 19, 2014. It said it expects to extend this date to Aug. 19, 2015 because it will meet conditions allowing the extension. The transaction is still expected to close this year, it added.

Facebook shares were up 9 cents at $75.07 on Nasdaq shortly before the close.

(Reporting by Jonathan Stempel in New York)

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Comments (1)
mattisland wrote:
You have got to be kidding. Who got deep enough to bribe someone in the SEC? I will inquire Monday to the SEC.

Jul 26, 2014 2:59am EDT  --  Report as abuse
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