Facebook vs. Nasdaq: One Party Plays Blame Game, Earning an F

One of the truths we’ve learned from analyzing miles and miles of column inches and billions of bytes of online news is that the bigger the event, the more the likelihood of negative coverage. It’s the Publicist’s Paradox: The more effective you are at generating attention for your company, event or happening, the more inevitable the negative coverage. So it was hardly surprising that the Facebook initial public offering would generate its fair share of skeptics and naysayers even before it actually went public.
Yet the May 18, 2012, IPO was supposed to be a glorious day for all stakeholders involved, making employees wealthy and bringing a much-needed boost to Wall Street. But what no one planned for was first that the underwriters would lower their financial forecasts and only tell insiders—not the general public—and that due to a tech overload, millions of dollars in trades either couldn’t be placed or couldn’t be canceled.
The result was an enormous black eye for both Facebook and Nasdaq, with some suggesting that the debacle would change IPOs forever. In fact, the U.S. Senate is holding hearings on the matter. And while the technical glitch was clearly Nasdaq’s responsibility, both parties suffered from the crisis, and in different ways shared responsibility for the problems.
The most interesting part of the aftermath was that each company handled the crisis like siblings in a family prank gone wrong. Facebook played the classic younger sibling—essentially saying, “I had nothing to do with it, it’s all everyone else’s fault,” shifting blame to its underwriters and the stock exchange while its CEO essentially disappeared into the sunset (and out of the spotlight) with his new bride.


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