We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
RSS FeedTechnology

Nasdaq considers trading discount due to Facebook IPO glitches


Reports claim that the exchange will make an announcement today regarding compensation

Article comments

Nasdaq is considering offering discounted trading fees to the financial firms that collectively suffered over $100 million (£65 million) worth of losses as a result of the technical glitches that occurred during Facebook’s much anticipated IPO.

According to reports in the Wall Street Journal, Nasdaq has thus far only earmarked $13.7 million (£8.8 million) for the traders’ losses, and the discounts idea is one of a range of options the exchange group is considering to make up the deficit.

Last month, Facebook’s much IPO was riddled with technical problems, which led to a delay of 30 minutes. The problem stemmed from NASDAQ’s IPO Cross, a pre-IPO auction process that the exchange put in place in 2006 that allows traders to place orders and agree on an IPO price before the stock is officially launched, which couldn’t handle the trading demand.

Rik Turner, senior financial services analyst at Ovum said that the companies were not only making losses from losing out on half an hour of trading, but because they were not receiving up to date information.

“The losses by these companies is estimated to be at approximately $100 million to $150 million, but I’d say these estimates are conservative. My suspicion is that they may go higher,” said Ferguson.

He added: “There was also apparently a problem whereby the turnaround time of processing orders expanded from three milliseconds to five milliseconds. Because of those two milliseconds that were not accounted for or factored into the process, these firms were not getting up-to-date information about what their position was. They were effectively trading in the dark.”

Nasdaq is planning to file the first part of its compensation with the US Securities and Exchange Commission today.

Share:

Comments

Nasdaq considers trading discount due to Facebook IPO glitches
Technology

What does your perfect datacentre look like?

What does your perfect datacentre look like?

The financial impact of rising energy bills is a headache for companies toomore ..


Glitch hits Virgin Media email distribution lists

Customers' personal information accidentally shared amongst the email chainmore ..

BBC tenders for £5.4m digital services contract

Digital services roster may be 'opened up' to new entrants at regular intervalsmore ..

Guardian, Washington Post win Pulitzer prize for NSA spying coverage

Both publications won the highly coveted Public Service awardmore ..

What UK business needs to do now with big data

In the final of a three-part series, we look at the potential for companies to become victims in the battle for big datamore ..

Ethical questions around big data

In the second of a three-part series, Pat Brans looks at the ethics of collecting 'big data'more ..

Send to a friend

Email this article to a friend or colleague:


PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.



In Depth
How M&A teams can create value by challenging the CEO

How M&A teams can create value by challenging the CEO

A typical “hold” period of nine to 18 months can generate increased sale value more ..

In Depth
What every company needs to do about big data?

What every company needs to do about big data?

In the first of a three part series, Pat Brans explores just how big 'big data' will get? more ..

Advertisement

* *