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Nasdaq OMX Group (NASDAQ:NDAQ) chief executive Robert Greifeld said the technical problems associated with Facebook’s (NASDAQ:FB) IPO last month were exacerbated because of the “arrogance” of the stock exchange’s staffers.
“There was not enough of a check and balance,” Greifeld said at a conference of corporate directors at Stanford University, adding that executives relied too heavily on assurances from the exchange’s technology group. “We did not have enough business judgment in the process.”
The opening of Facebook’s first day of trading on May 18 was delayed by 30 minutes because of technical issues, and later in the day, investors again had problems completing orders, canceling them, and confirming transactions. Several financial firms have said they lost significant amounts of money because of all the confusion. The marred opening is also being blamed for hurting investor confidence that led to the social network’s stock price falling in the days following its IPO.
Greifeld said they had tested systems extensively before the IPO by simulating higher trading volumes, but that the exchange was unprepared for increasing numbers of canceled orders. He said he might have made different decisions if he knew that Nasdaq wouldn’t be able to confirm several trades until much later. “If we knew it would take to 1:50 [p.m.] to get the allocations out, we might have had a different” outcome, he said.
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