Morning Business Memo:
A flurry of questions about that fumbled Facebook IPO as the share price continues to tumble. Did Facebook executives urge bankers to boost the number of shares to be sold to the public? What did big banks tell select investors about negative prospects for revenue? To what extent were other investors kept in the dark?
Securities and Exchange Commission Chair Mary Shapiro says her agency will look into “issues” involving the IPO. Wall Street’s self regulator, the Financial Industry Regulatory Authority (FINRA) also plans to look into communications by Morgan Stanley to insiders. The Wall Street Journal reports that less than three days before last Friday’s IPO, Facebook’s Chief Financial Officer David Ebersman decided to boost the number of shares offered to investors by 25 percent. That decision may have played a role in drop in value for Facebook shares.
Prepaid cards may face new federal regulations. The Consumer Financial Protection Bureau has taken the first step this morning, asking for comments on how to make sure prepaid cards are safe and come with transparent terms. Bureau Director Richard Cordray says the cards have fewer protections than bank accounts and debit cards. Banks have been criticized for the expensive fees that come with prepaid cards.
Samsung has received a huge amount of pre-orders for the Galaxy S3 smart phone. British media reports say Samsung has already received nine million pre-orders before launch, compared to Apple’s iPhone 4S’s four million units sold in the first three days. In The UK, the big consumer electronics retailer Carphone Warehouse says the S3 is the most popular phone of the year so far. The new phone goes on sale within days.
Doubts about Europe are driving global stock markets lower. Leaders of the 27 European Union countries will meet in Brussels today for a summit to deal with economic and debt problems. There are no signs of consensus about how to stop Greece from skidding into a chaotic bankruptcy
Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc (212) 456-5100