Photo: milkmit/Dylan Love
Facebook’s stock was supposed to begin trading at 11:00 am on the dot Friday, but instead it was delayed for a full half hour. Now NASDAQ is admitting it screwed up and offering an explanation as to what happened.”This was not our finest hour,” NASDAQ’s chief executive officer Robert Greifeld said over the weekend, according to Bloomberg. “We’re not happy with our performance.”
Greifeld chalked up the problems to the “poor design” of its IPO software.
Here’s the play-by-play of what went wrong from the Bloomberg report:
Problems surfaced on May 18 at 11:11 a.m. New York time after Morgan Stanley (MS), one of the underwriters that sold 421 million shares the night before, completed its role setting the price for the trade in Nasdaq’s opening auction, Greifeld said. Nasdaq’s software for IPOs allows investors to cancel or update details of orders until the auction runs. Trade requests received during the 5 milliseconds it took to operate the auction disturbed the process, leading to an imbalance of buys and sells and sending the program into a loop.
NASDAQ’s officials then had to intervene manually at 11:30 to get the IPO back on track.