Here’s Why Facebook Is Sticking With Nasdaq Over NYSE
Facebook (NASDAQ:FB) reportedly considered switching to the New York Stock Exchange after all the controversy surrounding its initial public offering, but finally decided to keep its listing on the Nasdaq stock exchange. Executives of the social networking company determined a move would further drain confidence in the company’s stock, according to the Wall Street Journal.
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Facebook has internally blamed the Nasdaq OMX Group (NASDAQ:NDAQ) for the technical glitches that affected its May 18 stock trading debut. The social network has maintained, again internally, that Nasdaq made a mistake in releasing 12 million trades delayed by the glitches in one go. Executives, angry that Nasdaq’s decisions may have compounded the technical issues, debated in the days following the IPO whether they should move the company’s stock. Facebook executives also felt that Nasdaq chief executive Robert Greifeld erred by promising to compensate investors who lost money the Monday after the IPO. The exchange has said it aims to pay $40 million to brokers who claimed losses from the glitches.
Facebook’s stock took a beating after the marred IPO, with investors questioning the initial $100 billion valuation of the company. Last week, research analysts at banks that underwrote Facebook’s IPO came out with a consensus value of $37.71 for the stock, lower than the $38 opening price. The stock hit its lowest point of $25.87 on June 5, though shares have rebounded since June 15.
Facebook’s decision to choose Nasdaq over NYSE was billed as a big win for the former.