Social networking giant Facebook Inc. (FB: Quote), which faced embarrassing technological glitches with its debut on the Nasdaq stock market on May 18, is considering a switch to list on the New York Stock Exchange, reports said.
Facebook's IPO, the largest ever for an internet company, raised $16 billion, giving the Menlo Park, California-based firm a market valuation of $104 billion, higher than that of Yahoo, Dell, Cisco, Visa, Amazon.com and HP. However, Facebook's debut is under regulatory review now.
Before trading began on Friday morning, the trading-system's design for processing order cancellations met with trouble and Nasdaq was reportedly accepting orders before trading started.
Nasdaq said matching up the buy and sell orders to arrive at the price of the first trade took five milliseconds instead of the normal three milliseconds. Amid this delay, the exchange's systems were flooded with messages to adjust orders or cancel trades.
After the trading problems began, Morgan Stanley, which led a group of 11 Wall Street underwriters, is said to have intervened to buoy the share price.
Wednesday, shareholders filed a class action lawsuit against the company, Morgan Stanley and other banks which were underwriters, alleging that they did not disclose a revised revenue guidance to all investors.
The plaintiff claims that analysts at the underwriters had lowered their second quarter and full year 2012 revenue outlook for Facebook during the IPO marketing process, but these revisions were not shared with all Facebook investors, but rather "selectively disclosed by defendants to certain preferred investors."
The analysts of underwriters revised Facebook's revenue guidance to reflect the increased number of Facebook users who access the social network through mobiles rather than traditional PCs.
Many people who invested in Facebook on its debut on Friday suffered big losses as the share fell in the following days.
Electronic trader Knight Capital Group Inc. (NITE, KCG) has said that it might suffer up to $35 million in pre-tax losses due to problems associated with the IPO of Facebook. The company said its second-quarter results would be hurt by this. Knight Capital has submitted claims for financial accommodation from Nasdaq.
"The company is also evaluating all remedies available under law. There are no assurances that the Company will be able to recover any of its losses resulting from the numerous issues and problems at NASDAQ relating to the trading of Facebook," Knight Capital said in a regulatory filing.
While reports have emerged that Facebook is planning to move to NYSE, NYSE Euronext, which runs the largest U.S. exchange, has reportedly denied the news.
It was reported in early April that Facebook chose the Nasdaq for listing instead of the NYSE, as Nasdaq was a fully electronic exchange, while the NYSE has the hybrid model that uses both floor and electronic methods. While the NYSE has more global recognition, it is more expensive compared to Nasdaq.
The stock closed its first trading day marginally higher from its IPO price of $38 at $38.23, but fell subsequently to close at $31 on Tuesday. The stock settled at $32 on Wednesday and is marginally higher in pre-market trading on Thursday.
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by RTT Staff Writer
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