Why Facebook's IPO was slightly delayed
A reporter waits for the share price of Facebook to start trading at the NASDAQ stock market moments before it went public on May 18, 2012 in New York, United States.
Jeremy Hobson: Facebook's first investors didn't lose their shirts. The company's stock is trading right where it started on Friday: 38 bucks a share. But the initial public offering didn't go exactly as planned. The start was delayed; computer systems locked up; and NASDAQ executives are now promising to fix the problems.
Marketplace's Scott Tong reports.
Scott Tong: “Not our finest hour” is how NASDAQ’s CEO described the IPO computer malfunction. Friday morning, lots of Facebook investors sent in cancellation or modification orders, which caused the software to reset. Buy and sell orders didn’t go through for hours.
At Tangent Capital Partners, Christopher Whalen says the issue is, the alphabet soup of U.S. stock markets is decentralized, fragmented.
Christopher Whalen: And they’re all taped together. With a patchworked network that changes every day. So you’re gonna have problems.
NASDAQ’s electronic plumbing has been criticized for not having enough human backup.
But don’t expect a return to the days of shouting traders, says finance professor Michael Goldstein at Babson College.
Michael Goldstein: In almost every aspect of life now, we have more elections doing the work than people. That ship has sailed.
Nasdaq reportedly will redesign its IPO system. U.S. regulators are looking into Friday’s glitch.
I’m Scott Tong for Marketplace.