The monumental $16 billion Facebook initial public offering was destined to mark another incredible chapter in the young company’s life.  Instead the dorm-room-born social networking juggernaut, starring in the world’s biggest IPO, faces shareholders fuming over $33 billion dollars in market cap losses (to date) and a public embarrassment that has tarnished the reputation of lead banker Morgan Stanley and the Nasdaq stock exchange which listed Facebook shares for public trading.

Investors became angry after it came to light that a Morgan Stanley analyst cut his earnings forecasts for Facebook just a few days ahead of the IPO, but he only told Morgan Stanley’s major clients, rather than making the forecasts public knowledge.   Critics are also livid that the increase in offering size and price, largely driven by greed, contributed to the epic fail.  Is it time for reputation management? [Read more…]