Were Twitter investors misled by analysts?

(MoneyWatch) Much of the attention regardingTwitter's (TWTR) initial public offering focused on whether it would turn into another Facebook (FB) -- meaning that its IPO would be fraught with glitches, accusations and disappointment. But with Twitter's opening day climb from an initial price of $26 to a high of more than $50, it would seem not.

And yet a Wall Street Journal report suggests that Twitter may have done something that ultimately got Facebook into a lot of trouble: selectively disclosed information. That is legal no-no. Twitter's high-flying shares fell about 8 percent on Friday to close at $41.65.

Right before the IPO, Twitter's underwriters -- the investment banks that helped stage the company's public debut and sell the shares to institutional investors -- predicted far lower growth than did analysts at banks and institutions that sat outside the IPO process. 

According to the Journal, Twitter's underwriters, including Goldman Sachs, Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp.'s Bank of America Merrill Lynch and Deutsche Bank AG, "forecast 2015 revenue at Twitter to be about 28 percent below the average estimate of four unaffiliated analysts who have published forecasts, according to investors briefed on the figures." The paper says the investment banks would not comment on the discrepancy.

Wall Street analysts often differ in their expectations of companies and yet they largely use the same or similar methods and analytic tools. They are also supposed to receive the same basic set of assumptions -- in the form of financial information and projections -- from the companies they cover. And everyone is supposed to get access to the same information at the same time.

This apparent conflict -- with those on the inside estimating lower growth than those on the outside -- suggests that Twitter insiders could have had some crucial nugget of information or projection that was not available to the others. The analysts at the underwriters aren't allowed to publish their views yet because of SEC rules, so they pass them onto their own bigger clients. Small investors are left out of the loop -- one reason why they may have been so eager to snap up shares at prices far higher than the initial IPO price.

The same thing happened with Facebook, which allegedly told some analysts from its own underwriters to lower their projections, especially regarding mobile. That was one of the red flags for investors in the know.

What's next for Twitter? If the stock doesn't maintain its lofty status, don't be surprised if some lawyers take interest in the matter.

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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.