FB IPO faces US regulatory probe as shares plummet 20pc

May 23, 2012 12:01

American authorities have reportedly launched an investigation into Facebook's multi-billion initial public offering, as the social networking giant rounded off the worst start for a major US flotation in five years.

Facebook shares slumped 8.9 percent in the wake of reports that two of the banks that helped advise Facebook on the IPO cut their sales forecast for the company over the last fortnight.

According to a Wall Street Journal report, the reductions from Morgan Stanley and Goldman Sachs may not have reached all investors before they bought shares in the 104 billion-dollar float.

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