Ever since Facebook debuted on the stock exchange , there has been a lot of finger pointing that has been going on against it. CFO David Ebersman’s decision to increase the size of the offering by a huge 25 % just days before the IPO is grabbing lot of attention. That single decision might have doomed its chances of gaining any jump on its debut – which is a hallmark of any IPO success.

The IPO is now becoming a legal as well as public relations nightmare for the social networking giant and its underwriters . There is a scope for legitimate complaints to be filed but putting the whole blame on CFO might just not ne right.

There are three major problems which have been irking the investors over the IPO , which was not long ago being seen as the deal of the century.

The first and the foremost problem is the failing of the computers at the Nasdaq stock exchange in early morning trading . Many investors ,as a result couldn’t place their deals or cancel them and there was little light over their orders being executed or not. The technical glitch might have cost a lot of investors a lot of money.

The second problem is that of the stock not popping as much as it was expected from it on day one. These pops are investors way of making good money , as such pops are guaranteed on hot IPO’s. And every dollar earned by the investors through popping is the money given away by the firm for nothing , which can be carefully saved by the underwriters by pricing the stock under the market value which is currently prevailing. However , in case of Facebook the market value was priced at 10 % above the IPO pricing, implying a lot of free money for the investors. But in the recent revelations what has come forward is that big institutional investors had greater knowledge of the business condition on Facebook as compared to the small investors. This could have played into the stock popping and could have made the long-term investors to jettison the stocks thereby exacerbating the decline in the price of the shares.

The big institutional investors were given knowledge about the futures performance of the Facebook stock through the research conducted by the underwriters. These are usually distributed in IPOs in helping to decide a fair pricing for the stock. However, in case of Facebook the estimates were cut midway in the roadshow by the underwriters , in an negative and unusual event. This was because Facebook had given them the info that the business outlook was deteriorating, an info that was not provided to the small investors.

As a result of the these cuts , along with the jump in pricing and sizing of the deal , a lot of investors “got the willies” on the deal. Small investors had no knowledge of all this , meanwhile.