Post date: May 21, 2012 10:22:13 PM
The Nasdaq is working to bandage its black eye, putting in new IPO procedures after bungling the Facebook debut last week.
USA-NASDAQ FACEBOOK - The Nasdaq OMX Group says it is changing its IPO procedures- hoping to save face after it bungled the historic Facebook initial public offering.
In the initial frenzy- and a 40 minute delay- Nasdaq had trouble sending electronic messages back to the brokerages that handle orders from individual investors, according to Reuters sources. That meant investors had no idea if their orders had gone through. The result: mass confusion- and a black eye for the Nasdaq.
Ed Ditmire covers the stock exchanges at Macquarie Group:
ED DITMIRE, ANALYST, MACQUARIE GROUP SAYING:
"In terms of the financial impact we think it's extremely limited. We think that regulations and SEC rules cap their liability at $3 million dollars and so we don't think they are likely to see a large financial loss."
The Securities and Exchange Commission says it is investigating the issues.
The Financial Industry Regulatory Authority will review requests of investors whose orders were not filled properly- and the Nasdaq has said there could be restitution.
It is unclear how long the review process will take.
Investor confidence in the largely computer driven equity markets was already fragile.
ED DITMIRE, ANALYST, MACQUARIE GROUP SAYING:
"I think over the last couple of years there have been a number of high profile market incidents that dented their confidence. Things like the flash crash 2 years ago, things like the August hyper volatility that saw markets rising and falling 4, 5 percent per day for a week straight, and now in 2012 a number of high profile IPO's that had issues."
The Nasdaq fiasco could benefit rival NYSE Euronext, as companies looking to list shares may see new value in the big board's hybrid trading model- which combines computerized trading with the human touch.
Bobbi Rebell, Reuters.