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A distraught Mark Zuckerberg texted 'Everything here is going really badly' before nearly cancelling Facebook's IPO (FB)

Facebook was once struggling to make the move into mobile.

Priscilla Chan and Mark Zuckerberg.

Facebook almost cancelled its $16 billion (£12.3 billion) initial public offering in 2012 because its internal revenue projections were so bad, according to court testimony in a class-action lawsuit.

In April that year, Mark Zuckerberg had texted Priscilla Chan, then his fiancée and now his wife: "Everything here is going really badly. Our revenue projection has gone down so much we now think we might go public at less than $50bn if things continue."

The Financial Times first reported on the court hearing, which took place in Manhattan on Wednesday.

At the time, Facebook was struggling to make the switch from desktop to mobile. The company went public in May that year.

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The court heard that Zuckerberg went into a "huddle" with some of Facebook's top executives — including David Ebersman, then the chief financial officer, and Sheryl Sandberg, the chief operating officer — in a hotel room in New York to discuss whether to float.

When that was over, he then sent another text to Chan: "IPO is on." She replied, "Yay."

According to the Financial Times report, investors, including the Arkansas Teacher Retirement System, are alleging that Facebook and its underwriters misled investors by failing to disclose that users' switch to mobile was affecting Facebook's revenue. The investors said the risk had been described as only theoretical.

But Facebook's legal representative, Andrew Clubok, said it wasn't possible for the company to have quantified that risk and that Facebook's revenue had begun to rebound by the time of the float.

A Facebook representative told the Financial Times, "We remain confident that our disclosures were complete, accurate, and complied with applicable law."

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While Facebook was originally slow to transition to mobile, it quickly evolved into a mobile-first company. By 2013, half its revenue was coming from mobile advertising. It now accounts for 85% of the company's ad revenue.

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