Facebook IPO: Trading glitch sullies Nasdaq
NEW YORK, NY - MAY 18: The Nasdaq board in Times Square advertises Facebook which is set to debut on the Nasdaq Stock Market today on May 18, 2012 in New York, United States. The social network site is set to begin trading at roughly 11:00 a.m. ET and on Thursday priced 421 million shares at $38 each. Facebook, a Menlo Park, California based company, will have a valuation exceeding $100 billion. (Photo by Spencer Platt/Getty Images) / Spencer Platt
(MoneyWatch) As grand entrances go, this one hit a banana peel.
Investors, journalists, and presumably Facebook (FB) CEO Mark Zuckerberg were excitedly waiting for the social network's blockbuster initial public offering this morning and then... nothing. A glitch delayed the IPO by nearly 30 minutes, amid reports that traders were having problems placing orders for the company' stock.
The Wall Street Journal reported that Nasdaq OMX (NDAQ), which runs the high-tech stock exchange on which Facebook shares debuted, was investigating the cause of the delay. Traders and brokers also had difficulty changing or canceling their orders, according to the paper.
Although the glitch could in theory have contributed to the lackluster performance of Facebook's stock on its first day of trading, the heavy volume of trading suggests that it is unlikely to have had much of an impact. Investors traded more than 460 million shares, a record for IPOs.
By contrast, the snafu in what is the second-biggest stock offering ever and the most ballyhooed public debut by a company since Google's (GOOG) 2004 IPO, is an embarrassment for Nasdaq. The exchange, which reportedly tested its trading systems for weeks to ready itself for the high-profile IPO, has been the site of other mishaps in recent months.
Splunk's (SPLK) April IPO was disrupted after some trades in the data-mining company's stock were mistakenly canceled. In March, BATS Global Markets, which runs equities and options exchanges, was forced to halt its planned IPO because of a technical problem on the BATS exchange.
The slip-up with Facebook's offering, while minor relative to the historic scale of the IPO, contributed to the general consensus the company's first day of trading was a disappointment.
"It wasn't quite as exciting as it could have been," Nick Einhorn, an analyst with IPO advisory firm Renaissance Capital, told The Associated Press. "But I don't think we should view it as a failure."
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