A major U.S. stock exchange is apologizing and offering $40 million in damages for the technology problem that marred the start of stock trading last month in Facebook, the popular Internet social-networking site.
The NASDAQ exchange in New York was initially overwhelmed by the large volume of investors wanting to buy and sell the Facebook stock. It failed to post an accurate price for Facebook shares for half an hour, and many investors said they did not know whether their purchase or sale orders were being processed.
NASDAQ chief executive Robert Greifeld says “clearly we did not succeed here.”
Some brokers and rival exchanges said the $40 million Nasdaq is offering in compensation falls far short of the damages they incurred May 18. They said the damages ranged from $100 million to $200 million.
Because Facebook has 900 million users worldwide, many investors viewed its stock, and the initial $38 price per share, as a potentially profitable investment. But after jumping to $45 in the first hours it was available, the Facebook stock ended the day only 23 cents higher. Since then, its value has fallen sharply. Thursday, it traded below $27 a share.