WSJ Blogs Real-time commentary and analysis from The Wall Street Journal
Deal Journal - An up-to-the-minute take on deals and deal makers.
May 22, 2012, 5:50 PM
Nasdaq Exec Says Tech Info Was Wrong in Launching Facebook
By David Benoit
Bloomberg News
Nasdaq continues to deal with the fallout from Facebook’s IPO this evening.
Days after a delay in the IPO opening appears to have hampered the stock’s launch and contributed to a now 18% decline in the stock, Nasdaq hosted a conference call with brokers and industry insiders. On the call, the exchange said that its decision to go forward with the IPO was based on “incorrect” information about what was going on, according to WSJ’s Jenny Strasburg and Jacob Bunge.
Here are the headlines hitting the tape right now from the call, which quote Nasdaq’s Eric Noll, executive vice president for transaction services:
*WSJ: Nasdaq Based Decision To Proceed With Facebook IPO On ‘Incorrect’ Info About System Problems – Nasdaq Official
*WSJ: Nasdaq’s Noll: ‘By No Means Would We Have Gone Forward’ With Facebook IPO If Full Technical Problems Were Known – Conference Call
*WSJ: Nasdaq’s Noll: Thought We Had Tested For This Scenario – Conference Call
*WSJ: Nasdaq’s Noll: Conversations With Facebook ‘Ongoing’ After IPO Problems – Conference Call
*WSJ: Nasdaq’s Noll Says Exchange Doesn’t Know If Customers Will Get Full Compensation For Facebook Losses Stemming From Technical Problems – Conference Call
Meanwhile, adding to potential pressure, Nasdaq is now facing a civil lawsuit from a Facebook investor.
From Dow Jones reporter Dan Strumpf:
The lawsuit, which seeks class action status, said Nasdaq “badly mishandled” the “hotly anticipated” IPO, leading to confusion over whether buy and cancel orders were executed and resulting in trading losses as Facebook share prices fluctuated wildly throughout the day.
“Because Nasdaq failed to process Facebook trades promptly and efficiently, parties attempting to purchase Facebook shares were unable to determine if they had properly done so,” according to the lawsuit, filed Tuesday in U.S. District Court for the Southern District of New York. “Nasdaq failed to process some trade orders for hours on end, and failed to cancel other orders despite customer requests to do so.”
Nasdaq wasn’t immediately available to comment for Strumpf’s story.
Still, the noise hasn’t exactly tanked Nasdaq shares. Though they fell 2% today to close at $22.32, they are down less than 3% since Thursday’s close, the day before Facebook’s shares began trading.
Facebook, is another story. Shares hit a new low in after-hours trading, recently trading at $30.77. |
