Share hiccup cost millions
Four of Wall Street's main market makers against Nasdaq over Facebook's botched IPO going to total $100 million. A technical glitch delayed the social networking company's market debut by 30 minutes and client orders were delayed. This meant that investors and traders suffered significant losses as the stock price dropped.
The exchange operator is facing lawsuits from investors and threats of legal action from brokers. Knight Capital, Citadel Securities, UBS AG and Citi's Automated Trading Desk are thought to have lost more than $100 million from problems arising from the deal. Nasdaq also has to contend with the outside prospect that it could lose the Facebook listing entirely after having just obtained it.
Facebook shares are still $5 short of their offering price and our bet is that they will sink still lower.