We're not talking about retail investors getting fleeced by big traders. We're talking about $100M positions held by professional traders who were told to go pound sand by the exchange.
The questionable nature of many aspects of Facebook's business are not new -- an IPO investment in Facebook is by it's nature a speculative investment in the future. So was Netscape, the company that started the dotcom boom.
But unlike the good old days in the 90's, today we find ourselves in a new world where for-profit exchanges who handle billions of trades a day suddenly cannot handle an IPO. You have institutional investors stuck with seemingly illiquid positions in Facebook panicking to close positions poisoning the well and creating an atmosphere of ambiguity and fear.
You can't roll out the "investment is a long term endeavor" bunkum when the entire business model of NASDAQ-OMX and NYSE-EuroNext is now to operate a liquid market. The NASDAQ utterly and completely failed to operate the market correctly, and traders who expect to be able to trade quickly were hosed. Facebook, the traders, and the retail investor all suffered because of NASDAQ's incompetence.
The questionable nature of many aspects of Facebook's business are not new -- an IPO investment in Facebook is by it's nature a speculative investment in the future. So was Netscape, the company that started the dotcom boom.
But unlike the good old days in the 90's, today we find ourselves in a new world where for-profit exchanges who handle billions of trades a day suddenly cannot handle an IPO. You have institutional investors stuck with seemingly illiquid positions in Facebook panicking to close positions poisoning the well and creating an atmosphere of ambiguity and fear.
You can't roll out the "investment is a long term endeavor" bunkum when the entire business model of NASDAQ-OMX and NYSE-EuroNext is now to operate a liquid market. The NASDAQ utterly and completely failed to operate the market correctly, and traders who expect to be able to trade quickly were hosed. Facebook, the traders, and the retail investor all suffered because of NASDAQ's incompetence.