Nasdaq to revamp system after tech problems on Facebook IPO: WSJ

Sun May 20, 2012 10:46pm EDT

Monitors show the value of the Facebook, Inc. stock at the closing bell at the NASDAQ Marketsite in New York, May 18, 2012. REUTERS/Keith Bedford

Monitors show the value of the Facebook, Inc. stock at the closing bell at the NASDAQ Marketsite in New York, May 18, 2012.

Credit: Reuters/Keith Bedford

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(Reuters) - The Nasdaq is planning to revamp its systems for handling stock offerings after acknowledging that technology problems had affected trading in millions of newly issued Facebook (FB.O) shares on Friday, the Wall Street Journal reported.

Individual investors were left in the dark for hours on Friday about whether their buy and sell orders for Facebook shares had actually been executed, in the latest of a series high-profile exchange glitches.

Nasdaq Omx Group Inc (NDAQ.O) Chief Executive Robert Greifeld said in a conference call with reporters on Sunday that there had been a malfunction in the trading-system's design for processing order cancellations, the Journal reported.

Greifeld also said extensive testing that was performed ahead of the deal failed to spot this problem.

Nasdaq officials said the company is planning to redesign its IPO systems, according to the Journal, although it did not give further details.

Investor confidence in the equity markets, where trading is largely computer-driven, has wavered since the "flash crash" in May 2010 when $1 trillion in shareholder equity was temporarily wiped out in a matter of minutes.

In March, the botched IPO of BATS Global Markets, the third-largest U.S. stock exchange, refocused attention on the potential for marketplace mishaps. A series of unforeseen glitches hit the company's market debut on its own exchange and caused it to take the extremely rare step of withdrawing its IPO.

(Reporting by Sakthi Prasad; Editing by Joseph Radford)

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Comments (1)
As a source, close to the Software Development on that Platform, I can only attribute these catastrophic failures to the greed of the responsible and their PM’s in charge to save coin. They shove the SDLC Testing Cycles offshore to do Testing Cheaply and exploit even the most unqualified Testing Bench to certify the code 1-2 levels deep. Cutting corners and complacency, ignorance runs rampant in those circles, and they continue to just cover things up until it blows up in their Faces. Then one poor guy gets fired for it, and the whole backpadding and going out for drinks circle of that club continues from new.

May 21, 2012 6:29pm EDT  --  Report as abuse
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