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06:01 GMT +3 hours23 December 2014
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Vkontakte Network Delays IPO after Facebook's Crash

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One of Russia's most-popular social networks, VKontakte, postponed its initial public offering indefinitely on Tuesday over the fallout from the flotation of the world's largest social network Facebook, its founder Pavel Durov said on Tuesday.

One of Russia's most-popular social networks, VKontakte, postponed its initial public offering indefinitely on Tuesday over the fallout from the flotation of the world's largest social network Facebook, its founder Pavel Durov said on Tuesday.

"The Facebook IPO has destroyed the faith of many private investors so VK's IPO is postponed for an indefinite term," Durov wrote in his Twitter page.

Durov holds 12 percent of VKontakte and has a right to vote using the shares of Russia's Mail.ru Group, VK's largest shareholder with a 39.99 percent stake.

Facebook floated on the NASDAQ on May 18. After listing at $38 per share in a $16 billion public offering which valued the whole company at $104 billion, Facebook has taken a hammering in the markets in the days since.

Allegations about the information available to investors have prompted a U.S. federal probe into whether specific investors received privileged information ahead of the IPO that should have been shared more widely.

Underwriting banks, led by Morgan Stanley, increased the size of the offer by 25 percent, and priced this at the very top of the proposed $34-$38 range, despite cutting revenue growth forecasts when the social network group revised its prospectus. A suit by shareholders claims JPMorgan and Goldman Sachs analysts alerted clients of Facebook’s lower growth forecasts in the days before its IPO, New York magazine said.