Nasdaq Earmarks $40 Million for Facebook Brokers

Bungled Facebook IPO | BCBusiness
The Nasdaq stock exchange is setting aside $40 million to reimburse brokers for a technical glitch during Facebook’s first day of public trading.

The stock exchange is setting aside funds for investors who experienced a technical glitch that kept them from trading during the social network’s initial public offering.

Nasdaq is throwing disgruntled investors a bone for Facebook’s bungled initial public offering last month.
 
In the social network’s first minutes of public trading, a technical glitch in the trading system brought countless valid trades to a grinding halt. The first trades were supposed to go through at 11 a.m. on May 18 but were delayed almost an hour because of the inexplicable technical issue.
 
Because of the delay, investors were unable to sell their shares at the going rate of $42 and were forced to unload at a lower price point.
 
While the NYSE Euronext is already criticizing the move as a potential detraction from the system’s inherent competition, investors are probably weeping with gratitude. Since Facebook went public, its shares have plummeted, going from $45 a share at its peak to just $27 as of Thursday. The 29-per-cent drop is the largest slump ever for a tech firm.
 
And trouble continues to follow Facebook — burned investors were prompted to file several lawsuits, alleging that insiders were provided with actual financials rather than the overly optimistic projections given to the general public.
 
At least eager investors have likely learned an important lesson from the overhyped IPO: Better manage your expectations.