Did Facebook Cost This Investor $35 Million?
Investment firm Citadel Securities’ broker-dealer unit may have lost as much as $35 million due to Facebook’s (NASDAQ:FB) glitch-ridden initial public offering on Friday. Citadel said its losses came from honoring trades that were canceled or changed during a period of around two hours on Friday.
Investing Insights: Facebook Silence Below $32: Shame on Us?
Facebook’s trading debut was marred by delays in order confirmations, with some investors not receiving certainty of buying, selling, and cancellations on time during a period. Nasdaq stock exchange’s holding company, the Nasdaq OMX Group (NASDAQ:NDAQ), has said it will investigate the matter and potentially refund investors who may have made losses because of the technical troubles. The Financial Industry Regulatory Authority has stepped into the probe, and will evaluate filings and claims by investing groups.
Citadel’s market-making business buys and sells equities for retail brokers and manages $13 billion in assets.
On Wednesday, Knight Capital Group (NYSE:KCG), a Citadel competitor, had announced in a regulatory filing that it suffered pre-tax losses of between $30 million and $35 million, and demanded compensation from Nasdaq. Analysts have estimated total losses to Wall Street firms from the troubles with the Facebook IPO at around $100 million. Retail brokerage E*Trade Financial (NASDAQ:ETFC) estimated its losses at about than $1 million.