Nasdaq Chief Says Glitches Weren’t at Fault for Facebook Stock Plunge

Michael J. De La Merced
Facebook IPO papers
Bloomberg via Getty Images

The technical issues that marred Facebook‘s first day as a public companyon Friday were embarrassing, but were not responsible for the decline in the social network’s stock price that led to an almost flat close for the day, the chief executive of the Nasdaq OMX Group said on Sunday.

The main issue, according to the executive, Robert Greifeld, was a number of order cancellations that flowed in during the final stages of the initial public offering process. That backed up Nasdaq’s systems in letting some investors know whether their orders had been executed.

While trading began at 11:30 a.m., Nasdaq was unable to deliver some trade execution messages until 1:50 p.m. Traders did not know whether their orders had gone through. And some traders did not get confirmation of their bids until after 2:30 p.m., according to market participants.

Nasdaq is “humbly embarrassed” by the issue, Mr. Greifeld told reporters during a conference call on Sunday.

Some investors and people involved in the I.P.O. process questioned whether the Nasdaq foul-ups contributed to a drop in Facebook’s stock price . After initially opening at $42.05, the company’s shares tumbled, nearly breaking through the $38 offer price. It rose again, only to fall dramatically toward the end of the day.

To these people, investors’ inability to know whether their orders had been filled may have significantly hampered trading.

But Mr. Greifeld said that nothing in Nasdaq’s data indicates that the exchange’s technical issues had any impact on Facebook’s shares.

“It would lead a reasonable person to conclude that it didn’t have an impact on the stock price,” he said.