Why are shareholders suing Facebook? Totally separate from the Nasdaq issues, there's a regulatory investigation beginning into how Facebook and its bankers handled sensitive financial information.Ī group of Facebook shareholders filed a lawsuit in a New York district court on Wednesday, alleging that important information about Facebook's financial outlook was "selectively disclosed" to big banks ahead of the IPO. That's going to be another giant wrangle. Meanwhile, traders who took losses because of the error are waiting to hear what Nasdaq plans to do about compensating them. Some brokerages said late Tuesday that they still weren't sure if some of their orders had closed, or at what price.įive days later, Nasdaq is still trying to untangle all of the problems. The error's ripple effects have lasted for days.
That left investors unsure about how many shares they bought or sold, and at what price. Also, many orders that went through weren't confirmed until hours later. Some orders that came in during the switchover didn't go through, or were filled at an inferior price later in the day. At 11:30, Nasdaq switched to another system, finally allowing the exchange to complete the process. On Friday, the process fell into an unexpected loop because many traders submitted changes to their orders before the opening trade began. In that process, Nasdaq matches up orders to buy shares with orders to sell. The details were unclear on Friday, but on Monday, Nasdaq published a mea culpa explaining that the trading delay was due to a "technical error." That's a mild term for what became a huge issue.įollowing its usual procedures, Nasdaq started the process that should have led to the stock's first official trade at 11:05 a.m. Others found that they were getting shares at a higher price than they expected.
Soon, some traders began complaining that it didn't seem like their orders were being completed. Trading was fast and intense, with more than 80 million shares changing hands in the first 30 seconds. The next half-hour was full of handwringing and confusion, until shares began trading around 11:30 a.m. Nasdaq told traders early Friday that it expected Facebook ( FB) shares to begin trading at 11 a.m. stock markets trading day begins at 9:30 a.m, but IPOs listed on the Nasdaq exchange typically don't start trading until at least an hour later. What happened on Friday? The strangeness began at the most basic level: actually opening Facebook for trading on Friday.
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