Nasdaq glitch contributes to lacklustre Facebook IPO
The chief executive of the Nasdaq stock exchange has apologised for technological hiccups that delayed the start of Facebook's public flotation on Friday.
Facebook's IPO turned out to be a moderate success at best. The share price ended up at $38.23 (£24.19) — just 23 cents above the original offer price — and even that was due to the company's underwriters working feverishly to avoid the share price dropping below $38.
One of the reasons for this lacklustre performance was the failure of the software used by the Nasdaq for IPOs. The software takes five milliseconds to launch an IPO and, according to Bloomberg, trade requests coming in during those milliseconds threw the system into a "loop".
As a result of this system failure, the IPO's launch was delayed for around half an hour and many investors were left clueless for hours as to whether their orders had gone through.
"This was not our finest hour," Nasdaq chief executive Robert Greifeld told reporters on Saturday, according to The Wall Street Journal. Greifeld also said he was "humbly embarrassed" by the incident, although he described the day's Facebook trading as "successful".
However, the WSJ also reported on how hard Facebook's underwriters, most notably Morgan Stanley, had to work to stop the share price from falling below the $38 starting point — an event that would have at best been highly embarrassing for the social network.
As the share price kept approaching the $38 mark, Morgan Stanley was repeatedly obliged to buy shares from a so-called 'overallotment' of extra shares. The overallotments are usually there to help meet high demand on IPO day, but Facebook's was used to keep the price up.
Big days
When Mark Zuckerberg remotely rang the Nasdaq starting bell from California on Friday morning — hours before his company's share trading was set to start — Facebook's engineers had hacked the button to automatically change Zuckerberg's status.
The status update read: "Mark Zuckerberg listed a company on NASDAQ — with Chris Cox and 4 others."
However, that was not the only significant status update to hit Zuckerberg's profile at the end of last week. On Saturday, the Facebook chief married his long-term girlfriend, Priscilla Chan, in what was reportedly a modest ceremony at their Palo Alto home.