Facebook 'lied' about number of users
AGENCIES
Posted: Thursday, Oct 11, 2012 at 1607 hrs IST
Social networking site Facebook provided US Securities and Exchange Commission officials inaccurate and inflated estimates of the number of its users and ultimately its worth a week before the company''s botched Initial Public Offering, it has emerged.
Facebook did not have accurate figures for the number of smartphone users who use its application and intentionally held back the real, significantly lower figures, until only a week before the 104 billion dollars IPO on May 18th.
The information has emerged after 12 letters dating from February 1 to May 17, were published on the SEC''s website 20 days after the company''s disastrous IPO, the Daily Mail reports.
According to the paper, the contentious exchanges were over Facebook’s apparent failure to disclose the exact figures for mobile phone user growth.
In the initial IPO filing from February 1st, the company said smartphone usage of Facebook increased around the world and numbered 425 million ''monthly active users''in December 2011.
When asked by the SEC to locate geographically its users it said that it couldn''t do so reliably, because for instance Facebook counted most BlackBerry owners as Canadian because their servers are based in Canada.
According to the paper, this prompted the SEC to question whether Facebook actually had 845 million individual users at the start of 2012, which the firm replied they believed was ''reasonably accurate.''
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