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No party for Facebook IPO birthday

Friday, May 25, 2012 - 02:13

May 25 - There was no celebration as Facebook marked its first week as a publicly traded company. Claims tied to the social network’s botched IPO on the Nasdaq are likely to exceed more than $100 million according to four big Wall Street market players, further damaging Nasdaq’s reputation. Jill Bennett reports.

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PLEASE NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL Facebook enters its second trading week as a public company with new accusations, legal actions and heat over its botched IPO on the Nasdaq. Losses could exceed 100 million dollars, according to four of Wall Street's main market makers, as they deal with thousands of problems with customer orders. A technical glitch delayed the debut of the social networking giant by 30 minutes last Friday, resulting in big losses for some investors and traders as the stock price declined. Nasdaq's reputation took a hit. Thomas Caldwell of Caldwell Asset Management: SOUNDBITE: THOMAS CALDWELL, CEO, CALDWELL ASSET MANAGEMENT (ENGLISH) SAYING: "This is a black eye, not a good thing, you wouldn't have courted it. It's going to cost some money to get out of it." But, the Nasdaq isn't out of the woods. Regulators and lawmakers are digging deep into how the Facebook IPO was handled. Retail investors have been scared off. Adding more pressure to Nasdaq Chief Executive Bob Greifeld who defended the exchange's performance at its annual meeting this past week. SOUNDBITE: THOMAS CALDWELL, CEO, CALDWELL ASSET MANAGEMENT (ENGLISH) SAYING: "He's a tough competitor and a smart guy and my sense is, I don't think he was fiddling while Rome was burning. No one anticipated the problems would be of the magnitude they were because of the very subjective valuation of Facebook." REPORTER STAND-UP: JILL BENNETT, REUTERS (ENGLISH) SAYING: "That valuation, set by lead underwriter Morgan Stanley, has also been scrutinized as part of the fallout but may not have a lasting effect. It looks like Silicon Valley still loves the go-to firm for tech companies. But Nasdaq is another story." SOUNDBITE: THOMAS CALDWELL, CEO, CALDWELL ASSET MANAGEMENT (ENGLISH) SAYING: "The score of winningness, if you will, will be: do you get listings as a result of this? So if I was in sales at the New York Stock Exchange I would be getting on my bicycle getting around seeing everybody and talking to Twitter and saying: 'you know what you can't afford to have this happen. You have to be in the big leagues.' I would be using that. So, if someone else wins, my sense it would be probably New York. It would be probably trying to use this event to your advantage and that's life, this is a blood sport." A blood sport that has resulted in more than a couple of black eyes to some of the biggest players on Wall Street. Jill Bennett, Reuters

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No party for Facebook IPO birthday

Friday, May 25, 2012 - 02:13