Facebook Inc (NASDAQ:FB) is being recommended for investigation by Janet Tavakoli, president of Tavakoli Structured Finance. In her editorial blog on Huffington Post, she suggests that Facebook could be pulling the old “pump and dump” routine on its stock, and she says that the Securities and Exchange Commission should investigate.
Right now there is an investigation regarding Facebook Inc (NASDAQ:FB)’s underwriters, who are accused of giving downward earnings guidance during the company’s initial public offering in May to some investors but not to others. She also points out that Facebook’s officers have been selling stock this month—prior to a major announcement involving Zynga Inc (NASDAQ:ZNGA).
Of course, we now know the details of the contract negotiation that has been going on between Facebook Inc (NASDAQ:FB) and games maker Zynga Inc (NASDAQ:ZNGA), and as Tavakoli points out, if any officers knew that the two companies had a falling out and then sold their stock before the information was made public, they could be in trouble.
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In Facebook’s SEC filing for the period ending in September, one key sentence indicates just how important Facebook viewed its relationship with Zynga “If Zynga does not maintain its level of engagement with our users, or if we are unable to successfully maintain our relationship with Zynga Inc (NASDAQ:ZNGA), our financial results could be harmed.”
So the question remains: did Facebook’s officers know that Facebook’s relationship with Zynga Inc (NASDAQ:ZNGA) was in jeopardy when they decided to sell their stock? Or was Mark Zuckerberg handling the negotiations on his own without informing any of his officers?
Tavakoli also writes about Facebook’s public relations campaigns, which have focused on the site’s strategy to bring in revenue through mobile advertising and its so-called “sponsored stories,” which now are in trouble because of a suit that’s been filed in California. And her list of Facebook Inc (NASDAQ:FB) strategies that end up being in trouble because of one reason or another goes on. She notes that Facebook drives publicity on various strategies like these, potentially to push up stock prices, and then those strategies seem to fail for various reasons.
So is the Zynga Inc (NASDAQ:ZNGA) relationship another Facebook Inc (NASDAQ:FB) strategy that’s gone wrong at just the right time?