Nasdaq to revamp system after Facebook IPO glitch
The Nasdaq is planning to revamp its systems for handling stock offerings after acknowledging that technology problems had affected trading in millions of newly issued Facebook (FB.O) shares on Friday, the Wall Street Journal reported.business Updated: May 21, 2012 12:33 IST
The Nasdaq is planning to revamp its systems for handling stock offerings after acknowledging that technology problems had affected trading in millions of newly issued Facebook (FB.O) shares on Friday, the Wall Street Journal reported.
Individual investors were left in the dark for hours on Friday about whether their buy and sell orders for Facebook shares had actually been executed, in the latest of a series high-profile exchange glitches.
Nasdaq Omx Group Inc (NDAQ.O) Chief Executive Robert Greifeld said in a conference call with reporters on Sunday that there had been a malfunction in the trading-system's design for processing order cancellations, the Journal reported.
Greifeld also said extensive testing that was performed ahead of the deal failed to spot this problem.
Nasdaq officials said the company is planning to redesign its IPO systems, according to the Journal, although it did not give further details.
Investor confidence in the equity markets, where trading is largely computer-driven, has wavered since the "flash crash" in May 2010 when $1 trillion in shareholder equity was temporarily wiped out in a matter of minutes.
In March, the botched IPO of BATS Global Markets, the third-largest U.S. stock exchange, refocused attention on the potential for marketplace mishaps. A series of unforeseen glitches hit the company's market debut on its own exchange and caused it to take the extremely rare step of withdrawing its IPO.