Nasdaq's Facebook IPO was arguably the highest-profile stock offering of the new millennium, but to say things went off without a hitch would be a lie.
Twitter’s IPO (initial public stock offering), which was put in the hands of the New York Stock Exchange earlier this month, is primed and ready to go. According to an AP report, the NYSE held a mock IPO on Saturday in an effort to root out any technical glitches that might interrupt the genuine stock offering currently set to take place sometime in late November.
The NYSE’s Twitter IPO dry run was “successful,” said NYSE spokeswoman Marissa Arnold in a statement obtained by The AP.
NYSE’s concern for the Twitter IPO is no big surprise. While the stock exchange frequently tests different trading systems on weekends, away from the busy throes of the trading week, Saturday’s mock IPO for Twitter was the first in the NYSE’s history. Clearly, the stock exchange is working to avoid the pitfalls that Nasdaq experienced last spring when another major social media/technology company went public.
Nasdaq’s Facebook IPO was arguably the highest-profile stock offering of the new millennium, but to say things went off without a hitch would be a lie. The Facebook IPO, which should have been the peak of this era’s stock trading prosperity, was plagued by delays, order errors, and other technical difficulties that diverted headlines away from Facebook’s actual stock and left the IPO in shambles. Undoubtedly, Facebook wasn’t pleased with the outcome, and Nasdaq hardly got away Scot-free either: the Securities and Exchange Commission fined the stock exchange a costly $10 million for the debacle.
Considering the disastrous nature of the Facebook IPO, it’s hardly surprising that Twitter avoided Nasdaq in favor of the NYSE for its own stock IPO, and NYSE is clearly dedicated to making sure that Twitter’s trust was well-placed. The stock exchange brought in a number of high-profile traders on Saturday to simulate purchases and sales of the tech giant’s stock and to make sure that all systems were ready for the amount of traffic they are surely to experience when the stock actually goes public.
But how will Twitter’s first foray into the public stock world go if it doesn’t have any technical difficulties to circumnavigate? According to financial advising consultant, William Baldwin, maybe not as well as Twitter is hoping. While interest is high in Twitter’s stock – especially after the company announced its plans to sell 70 million shares in the modest price range of $17 to $20 on Thursday – Baldwin says that consumer attention is dangerously low. No one is tweeting about the IPO, even as it looms closer, a sign that Baldwin says should give investors pause before purchasing shares on IPO day. If the demand is low, the stock price will tumble even further. However, Baldwin’s logic may prove flawed if enough corporate and institutional buyers hit the NYSE on day one to buy in bulk.
Leave a Reply