Monday, 21 May 2012 17:56
NEW YORK: Nasdaq OMX Group Inc said on Monday it is changing its initial public offering trading procedures following glitches in Facebook Inc's market debut at the end of last week that prevented some traders from knowing for hours whether their orders for shares had been completed.
The exchange operator said in a note to traders that modifications to its IPO and halt cross application would prevent the problems that occurred on Friday from recurring.
Facebook Inc's shares slid below their $38 issue price in pre-market trading o n Monday as support from underwriters of the initial public offering dissipated after its Friday debut.
The social networking company's debut was marred by a shaky opening on the Nasdaq that will be reviewed by the SEC and a falling share price, which forced lead underwriter Morgan Stanley to defend the $38 price level by purchasing shares on the open market.
"Who knows what this is? Could this be nervousness, could this be people saying 'I am not dealing with this' -- I don't trust the system," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
"It was just a poorly done deal and it just so happens to be the biggest deal ever for Nasdaq and they pooched it, that's the bottom line here," he said.
Facebook's shares fell 4.1 percent to $36.65 in premarket Nasdaq trading.
Copyright Reuters, 2012