Nasdaq ups ante in Facebook reimbursement plan

July 21, 2012

(AP) — The Nasdaq stock exchange is chipping in more money to reimburse investment firms that lost money when online social network Facebook went public in May because computer glitches delayed their trading orders.

The revised proposal announced late Friday calls for Nasdaq to pay $62 million to firms ensnared in the breakdown. That's up from the $40 million pool that Nasdaq initially announced seven weeks ago.

The exchange says all the payments will now be in cash instead of trading credits as envisioned under the original program. The trading credit provision had riled the New York Stock Exchange, which attacked the plan as an attempt to entice firms to defect to the rival Nasdaq exchange.

Nasdaq says more firms will be eligible for reimbursement under its new proposal, too.

Facebook went public May 18 amid great fanfare, but computer glitches at the Nasdaq threw the day into chaos. The opening was delayed by half an hour. Technical problems kept many investors from buying shares in the morning, selling them later in the day, or even from knowing whether their orders went through. Some investors complained that they were left holding shares they didn't want.

Facebook's stock originally priced at $38 and closed that first day at $38.23 after going as high as $45, a disappointment to speculators who had hoped for a first-day pop. Nasdaq has said it was embarrassed by the glitches, but that they didn't contribute to the underwhelming returns. The stock closed at $28.76 Friday, down 24 percent from the IPO price.

The new program will still require approval by the U.S. Securities and Exchange Commission.

Explore further: Nasdaq glitch confuses investors of Facebook IPO


Related Stories

Nasdaq caused $35 mn loss in Facebook IPO: broker

May 24, 2012

A New York broker has asked Nasdaq to compensate it for up to $35 million in losses on the Facebook initial public offering due to the market's computer problems on the first day of trade.

Reports: UBS may have $350M Facebook trade losses

June 9, 2012

(AP) — Swiss bank UBS AG may have lost as much as $350 million due to technical glitches on the Nasdaq stock exchange the day Facebook went public, according to reports published Friday.

Recommended for you

Internet giants race to faster mobile news apps

October 4, 2015

US tech giants are turning to the news in their competition for mobile users, developing new, faster ways to deliver content, but the benefits for struggling media outlets remain unclear.

Radio frequency 'harvesting' tech unveiled in UK

September 30, 2015

An energy harvesting technology that its developers say will be able to turn ambient radio frequency waves into usable electricity to charge low power devices was unveiled in London on Wednesday.

Professors say US has fallen behind on offshore wind power

September 29, 2015

University of Delaware faculty from the College of Earth, Ocean, and Environment (CEOE), the College of Engineering and the Alfred Lerner School of Business and Economics say that the U.S. has fallen behind in offshore wind ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.