Nasdaq ups ante in Facebook reimbursement plan

Jul 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: Monoprice takes on Amazon in trade of cheap electronics

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Reports: UBS may have $350M Facebook trade losses

Jun 09, 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.

Nasdaq readies payouts for Facebook IPO glitch: WSJ

Jun 05, 2012

Nasdaq is taking steps toward compensating investor losses due to computer glitches that fouled trading on the first day of Facebook's $16 billion IPO, the Wall Street Journal said Tuesday.

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.

Recommended for you

Chinese tech giant Alibaba set to make a splash with US IPO

3 hours ago

The largest tech IPO of the year will come from a company that many Americans have never heard of. Alibaba Group - a Chinese e-commerce behemoth - has decided to go public in the U.S. after months of speculation that it would ...

Ex-Apple chief plans mobile phone for India

Apr 19, 2014

Former Apple chief executive John Sculley, whose marketing skills helped bring the personal computer to desktops worldwide, says he plans to launch a mobile phone in India to exploit its still largely untapped ...

Airbnb rental site raises $450 mn

Apr 19, 2014

Online lodging listings website Airbnb inked a $450 million funding deal with investors led by TPG, a source close to the matter said Friday.

User comments : 0

More news stories

Growing app industry has developers racing to keep up

Smartphone application developers say they are challenged by the glut of apps as well as the need to update their software to keep up with evolving phone technology, making creative pricing strategies essential to finding ...

Making graphene in your kitchen

Graphene has been touted as a wonder material—the world's thinnest substance, but super-strong. Now scientists say it is so easy to make you could produce some in your kitchen.