Ever since Facebook Inc (NASDAQ:FB)’s much-hyped IPO botched at Nasdaq, there has been growing frustration among Facebook executives over the exchange’s bungling. The social media company went as far as to consider switching exchanges. However, despite the tension Facebook has decided to stay put for now, according to Wall Street Journal.
Facebook Inc (NASDAQ:FB) shares are already sliding, and the company officials think that a switch in stock exchange would further lower the investor confidence in the company. The decision came after Nasdaq tried to restore the relations, according to sources close to the company’s plans. The Mecca of technology listings has already announced to set aside $40 million for brokers who suffered losses due to technical glitches.
After the failed IPO, the condition worsened when Mr. Greifeld, Nasdaq’s chief, told reporters through a conference call that the technical errors at Nasdaq had not affected FB stock’s performance. Facebook officials considered it an act of betrayal and one of the executives went on to say, “You don’t understand the hole you’re in” to Mr. Greifeld. Facebook also criticized Nasdaq’s lack of communication. When the trading began on May 18, Nasdaq didn’t contact David Ebersman, Facebook’s chief financial officer and the key person for the IPO.
Facebook recorded a revenue of $3.7 billion in 2011. Nasdaq has been a preferred choice of up and coming technology companies, and the listing of Facebook Inc (NASDAQ:FB) was seen as the ultimate win for the exchange. Unfortunately, technical problems on the day of IPO have distanced it from one of the hottest technology companies, and drawn scrutiny from securities regulators.
Now the exchange is trying hard to salvage its reputation with the Silicon Valley firms. Nasdaq’s CEO also publicly acknowledged the exchange’s arrogance during the Facebook IPO.
The SEC has asked Nasdaq to upgrade its systems as a part of investigation whether Nasdaq acted improperly.