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Nasdaq Fined $10M Over Facebook IPO Failures
twoheadedboy writes "Nasdaq has been fined $10 million by the U.S. Securities and Exchange Commission over 'poor systems and decision-making' during the Facebook initial public offering. When Facebook went public on 18 May 2012, it was hoping for a major success, but technical glitches and poor decision making at Nasdaq caused real problems. The SEC said 'a design limitation' in the system to match IPO buy and sell orders was at the root of the disruption, thought to have cost investors $500 million. Orders failed to register properly, leaving banks like Citigroup and UBS in the lurch and making additional, unnecessary bids. They may still win money back from Nasdaq if legal challenges go their way."
The SEC said 'a design limitation' in the system to match IPO buy and sell orders was at the root of the disruption, thought to have cost investors $500 million.
Nasdaq has been fined $10 million by the U.S. Securities and Exchange Commission over 'poor systems and decision-making' during the Facebook initial public offering.
And people wonder why the average person hates the very idea of the stock market.
The delays caused the investors to lose less money than they would have lost otherwise. Had things been happening at maximum speed people would have come to realize even sooner that facebook was wildly overvalued and the market correction would have driven the price even lower. Instead it only lost around half of its value on opening day.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
A 10 million fine on the scale of these companies is NOTHING... the paperwork to pay it costs as much as the fine...
Once they get to this 'too big to fail' state... any fine under a billion dollars is nothing. You're just wasting everyones time.
Either correct the fine so that the company will notice and will change.. Or just ignore it.
This half assed way of doing things we use right now is pointless.
stop it.
Because when you average it all out, no one really lost anything.
It depends what you mean by Joe q investor, but it is possible for a lot of people.
https://eresearch.fidelity.com/eresearch/ipo/ipocalendar.jhtml#eligibility
But really you don't want to mess with that sort of thing. Sound investing isn't about gambling with hot ipos. It's about using sound principles of portfolio management, diversification and risk management, and keeping management costs down.
http://online.wsj.com/article/SB10001424127887323475304578502973521526236.html
We overvalued FB by some margin and then some, didn't realize we're essentially scryers looking into our crystal balls that display models that we built, for people like us, who believe these schemes to be true (and hence make them true, as long as petty things like market or reality don't butt in), we lost money because we're too dumb to realize our models have nothing to do with reality and once they hit reality they crumble.
But it's all Nasdaq's fault for doing ... uh ... what exactly? Not allowing us to blow away our money fast enough? Because that's essentially the "mistake" Nasdaq made. But hey, maybe that's required for the scheme to work, because the only thing that would've kept FB share values up was money artificially pumped into it to inflate it.
So yes, Nasdaq is to blame. They didn't let us play the market like we usually do, sue their pants off 'em!
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Don't go public to begin with. Screw the idea of shareholders. Once you go down that road, you no longer "own" your company. You operate at the largesse of the shareholders, who are only interested in money. Money, in the long run, is the poorest of motivators for success.
Once they got in and started floating that insane value for Facebook pre IPO, it should've been obvious to investors that the fix was in. If you see GS jumping in on anything, think of it as a neon "Warning: anal rape ahead" sign. Unless, you're privy to the innards of the deal of course...
I swear to God...I swear to God! That is NOT how you treat your human!
The question is how do you accurately value a company with an unproven business model and no clear profit lines? Also considering that this company has had a whole legion of predecessors who had the same idea, but failed for one reason or another to become profitable or sustainable.
Take all the subscribers, assume 20% growth in subscribers per year, factor in for interest, compounded continuously. Then take the resultant number and multiply by zero.
If you are not allowed to question your government then the government has answered your question.
Just remember: An 'analyst' is somebody who can make more money by selling advice on investing than he can by investing according to his own advice...
This was covered by many sources (for instance, Computerworld). Apparently the process that failed was the Nasdaq IPO Cross.
"Buying the IPO" is just buying stock in the IPO auction. "Shorting" the stock means selling stock which you do not own. So if you buy the IPO and then immediately sell, you're not actually shorting it. This is high-risk day trading, and not an activity recommended for Joe Q. Investor. Not to mention that the high IPO price for FB seems to have been crafted to punish traders expecting an "IPO pop".
Now, suppose you wanted to sell more than you initially bought. Then, the excess sell quantity actually is "short", and you must confirm the ability to borrow the stock from e.g. your broker or some other large institution. If you do not confirm the ability to borrow, then you are shorting "naked" which is not permitted. Because everyone is in this situation on IPO day, you will probably have a hard time finding someone to borrow from without paying out the nose for the "stock loan".