How Did Wall Street Profit From Facebook’s IPO Disaster?
The banks underwriting Facebook’s (NASDAQ:FB) initial public offering made gains of about $100 million through their work trying to stabilize the shares in public trading, according to a Bloomberg News report.
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A person familiar with the matter told Bloomberg the gains will be shared by all banks on the IPO syndicate, including lead underwriter Morgan Stanley (NYSE:MS).
Morgan Stanley will reportedly use some of the gains to reimburse clients who lost money because of glitches in trade execution, for which Nasdaq OMX Group (NASDAQ:NDAQ), the exchange operator, is currently under investigation by the Securities and Exchange Commission.