NASDAQ Fined $10 Million Over Botched Facebook IPO

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So It Wasn’t All Facebook’s Fault?

Remember the Facebook IPO that many, including thought was bungled because traders couldn’t figure out if the orders had been executed or not? It looks like the market exchange responsible for the botched trades and lack of information, the NASDAQ that mainly features high tech companies, will have to some blame for the errors that occurred on May18, 2012.

NASDAQ will pay $10 million in damages for the mishaps and for not pausing the trading after many market participants complained they could get real bids from the exchange and were unsure of prices after hearing most people didn’t get confirmations

The fine levied against the NASDAQ is the largest an exchange has ever incurred and the damage to investors is estimated at hundreds of millions. It wasn’t all Facebook’s fault, although there is some evidence the demand for shares was over anticipated since they have failed to rebound to the IPO price of 38 dollars.

Facebook is doing better with mobile marketing but the company just got into a media scuffle with advertisers because ads were associated with negative status updates. Facebook is shamelessly advertising for profit with large billboard size ads as the opening story in everyone’s feed, that increases the likelihood negative spillover effects from poorly associated ads can spread virally – instantaneously.  Facebook may need to take a step back from the pursuit of profit to make sure the user experience hasn’t decreased due to the need to return value to shareholders.

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