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Facebook's IPO whodunit

Intrigue surrounds Facebook's public offering, while Google wins patent phase of trial against Oracle. Also: Massive HP layoffs.

Steven Musil Night Editor / News
Steven Musil is the night news editor at CNET News. He's been hooked on tech since learning BASIC in the late '70s. When not cleaning up after his daughter and son, Steven can be found pedaling around the San Francisco Bay Area. Before joining CNET in 2000, Steven spent 10 years at various Bay Area newspapers.
Expertise I have more than 30 years' experience in journalism in the heart of the Silicon Valley.
Steven Musil
3 min read

As Facebook's stock started its first week of trading, there were some startling allegations as to why the stock was tanking.

Facebook itself may be responsible for investors' tepid response to the social network's stock, which has been mostly falling since it went public on May 18. (As of Friday morning, Facebook shares were bouncing around the $32 level, down about 16 percent from the $38 IPO pricing.)

Initially, it looks like Morgan Stanley, the lead underwriter on the massive offering, was to blame for allegedly telling major clients it had reduced its revenue forecast for the company, scaring off many big investors in the days leading up to the IPO. But no one knew why Morgan Stanley -- as well as JPMorgan Chase and Goldman Sachs, which also served as major underwriters for the deal -- would revise their estimates so close to the largest tech offering in history.

Then came word that the underwriters cut their estimates because a Facebook executive instructed them to. A source tells Henry Blodget at Business Insider that the estimate reduction was then "verbally conveyed to institutional investors... but not to smaller investors."
 Morgan Stanley to make price adjustments on Facebook trades
  Facebook, Zuckerberg sued over IPO
  Investment firms warned of Facebook woes before IPO, report says
  Facebook's banks reportedly make $100M 'stabilizing' stock

Nasdaq expresses regret over Facebook IPO

The exchange would have delayed the offering had it known just how bad its own technical problems were, a senior official says.
  Facebook IPO investor sues Nasdaq over trading delays

More headlines

Jury verdict: Android doesn't infringe Oracle's patents

The decision in the long-running case came as vindication for Google in its bitter battle with Oracle over Android.
  Jury foreman: Oracle wasn't even close in patent phase
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  Don't expect a patent offensive from victorious Google

HP plans to cut 27,000 jobs, plow savings into R&D

The cuts are part of a major overhaul for the company as it looks to trim costs and restart its guttering spirit of innovation.

FBI quietly forms secretive Net-surveillance unit

CNET has learned that the FBI has formed a Domestic Communications Assistance Center, which is tasked with developing new electronic surveillance technologies, including intercepting Internet, wireless, and VoIP communications.
  U.S. spy agency looking to train students in cyber ops

Here comes Yahoo's own Web browser -- Axis

Yahoo's search group attempts to take control of its destiny by launching its own browser. Surprise: It's good.
  Browser choice: A thing of the past?

How Amazon is changing the rules for books and movies

The online retail giant is tapping its huge customer base and vast technical underpinnings to reshape the way books, movies, and television programs are made.
  Amazon brings Appstore Test Drive to the handset
  Amazon Prime acquires access to Paramount films

Facebook Camera makes its debut

The social network launches an official iOS app that lets you capture, filter, edit, and share photos.
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Google officially closes $12.5 billion Motorola Mobility deal

The long wait is finally over. Google CEO Larry Page says Dennis Woodside, a "long-time Googler," will take over atop Motorola Mobility.
  What Google can do with Motorola
  ITC judge recommends banning Xbox imports

Tim Cook: Bringing a world of change to the world of Apple?

According to a new feature from Fortune, Cook has dramatically changed some things at Apple, making it more corporate than Steve Jobs might have liked.
  Jonathan Ive: Apple's current work is 'most important' yet
  Apple tinkers with iPen stylus and haptic feedback

SpaceX's Falcon 9 rocket launches Dragon to orbit (photos)

See all photos

SpaceX cargo ship takes off on commercial flight to station

Three days after a last-second launch abort, a commercially developed rocket and cargo ship blasted off on NASA's first commercial flight to the International Space Station.

Also of note
  Proposed NY ban on anonymous posts comes under fire

  Jonathan Ive: Apple's current work is 'most important' yet
  Google doodle honors synthesizer inventor Robert Moog