Given that everyone was so excited and looking to the future with Facebook’s initial public offering on Friday, there has been a surprising absence of good news to come out of the it since it happened. It’s not even that there’s an absence of good news but an overwhelming pall of bad news. Friday stumbled out of the gates and never really caught up, ending in a flat day for Facebook shares. Yesterday produced even less palatable morsels as the afternoon ended disappointingly with shares trading for 11% less than the IPO price.
Those technical problems hindering Facebook’s IPO seem to have left a lot of people holding onto significant financial losses and, according to the Wall Street Journal, many brokers and traders are calling for Nasdaq OMX Group, the company that owns the operates the Nasdaq, to recompense for those losses.
Nasdaq OMX has said it will use $10 million from the Facebook shares the exchange owns to make up for some of the losses endured by investors the past two trading days. But even that’s not expected to cover all of the fumbled trades because, according to Bob Griefeld, Nasdaq OMX’s chief executive, there simply aren’t enough shares available at the price sought by brokers.
None of this exactly restores confidence in Facebook shares or Nasdaq OMX’s reputation. Just ask George Brady. He bought 1,000 shares of Facebook soon after they became available but had his purchase stall out on his Charles Schwab account. Facebook shares had already started to dip and yet he was still standing out in the cold.
Then, six hours of silence followed. At around 6:14 p.m, Schwab told him that he had bought the shares at $40 and that he still held them, despite the cancellation request.
“I was stuck for six hours trying to figure out whether I owned this dog or not,” said Mr. Brady, who lost $2,775 when he sold his shares on Monday. He says he has been in touch with Schwab and has contacted the SEC.
As terrible as it is to lose almost $3,000 on what was heralded as a sure-bet by many speculators, Brady should probably be glad he sold off his shares on Monday and swallowed the loss that he had then because today doesn’t look much better. As of writing this, Facebook shares opened 7.41% down from yesterday and are slowly slipping down to the $30 mark.
As bad as that $3,000 loss is, it could be worse. Brady’s name could be Mark Zuckerberg and he could’ve lost $2 billion yesterday.