NASDAQ and SEC Working On Deal For Botched Facebook IPO:
Remember that ill-fated Facebook IPO that happened a few months ago? Facebook hit Wall Street with an opening price of $38 dollars on March 18 2012 but soon after the initial public offering, the stock was an ominous disaster falling to nearly half the value in just a few days. The IPO was a not-to-do-list of errors from a late start, over anticipated demand, to computer errors that did not allow investors to know if they had actually purchased shares and at what price they had obtained them.
NASDAQ was the exchange of choice for Facebook which opted not to go with the NYSE. The stock being halted along with computer glitches caused millions of dollars to be lost by some investors and sent the stock careening. The NASDAQ is working with the Securities and Exchange Commission to right the wrongs for some investors.
Compensating investors for Facebook’s ‘face plant’ IPO is going to be a daunting task because some investors ordered the same amount of shares several times without waiting for a confirmation. Some investors didn’t find out until the next day if they even had shares and the price they received may not have been close to what they selected. Investors should find out by March 29 what the compensation will be and estimates are close to $100 million in total funding that may be distributed to make investors ‘whole’ again.
Negative repercussions of a bad IPO can linger for years and a quick resolution to the Facebook initial public offering will be good for both Facebook as well as the NASDAQ.