If you haven’t heard about Facebook’s disastrous IPO debut, I welcome you out of your cave and am happy to give you an update. Essentially, the Nasdaq stock market delayed the 11AM start by as much as thirty minutes while they worked out a computer glitch that left big bank trading desks blind as to who bought what, and at what price.
Shortly after that, stock prices surged to about $45, but then quickly returned to their $38 target price and stayed there until close at 4PM. Starting monday, shares took the gradual path down to the low $30 range, and have now stabilized at about $32 per share. Unfortunately for Facebook, it has also come to light that Morgan Stanley, one of the IPO’s largest underwriters, concealed a critical financial forecast just before the launch of the IPO.
Now that investors and the Securities and Exchange Commission has gotten word of the concealed documents, Facebook and its underwriters have been hit with a slew of lawsuits and formal inquiries regarding the event. Also, the Nasdaq and federal regulators have been busy sorting through the trades from Friday trying to nail-down the particulars of each deal and working to ensure everyone received their shares and at a fair price.
Yesterday, Morgan Stanley announced that they will be working to get their customers the best prices on the shares they purchased during the IPO launch. And today, Fidelity investment and brokerage firm announced they have already accounted for all the shares their clients purchased last Friday, but are still working with the Nasdaq and federal regulators to resolve any further issues.
According to Reuters, the Nasdaq had all orders, completed or not, back to member firms before 2PM last Friday. Fidelity issued their own notice for clients explaining, “we realize that some customers still have questions about how these delays may have affected their trading activity”, and “we understand that Nasdaq is working with federal regulators to determine what, if any, accommodation might be made. However, customers should assume that any shares of Facebook stock currently credited to their accounts are owned by them and available for trading”.
To reassure customers of Fidelity that they will get the best possible outcomes from the situation the notice further exclaimed, “we will continue to work with the industry to get NASDAQ to come to a resolution that addresses the concerns of our customers”. So at least Fidelity is on top of ensuring their end of the bargain was properly upheld. Hopefully we can expect the same from all the banks involved.
We will keep you updated on the current happenings with the Facebook IPO and the Morgan Stanley concealed documents scandal. Check back with Webpronews for regular updates.