Nasdaq Muddies Facebook’s IPO

It was supposed to be Facebook's day to shine, as the social network made its entrance as a publicly traded company. By the afternoon of May 18, Reuters was referring to Facebook's debut on Nasdaq as "surprisingly modest," and the Wall Street Journal was saying it had "plenty of buzz but not much pop." As WSJ reported, the company's shares began the day at $42 and ended the day at around the $38 offering price.

This could be seen as proof that Facebook's stock was "well priced" to begin with—not a bad way to begin its existence as a public company. If there was any real loser, it was Nasdaq OMX Group, which operates the Nasdaq Stock Market and competed with the New York Stock Exchange to list Facebook, according to WSJ. Technical problems delayed the start of trading of Facebook stock by 45 minutes, Reuters reported. That left investors "guessing for more than two hours about whether their buy and sell orders had actually been executed."

Questions about Facebook's viability as an advertising platform aside, Nasdaq's technical glitches may have dampened Facebook's trading debut—its overall effect won't be known for a while. Other rising high tech players were probably watching very closely, and might not be feeling very confident in Nasdaq's ability to handle heavy trading volume. The sooner Nasdaq can offer a thorough explanation for the delays in processing the trading orders, the better.

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