Individual investors were left guessing for more than two hours on Friday about whether their buy and sell orders for newly issued Facebook shares had been actually executed.
The Nasdaq Stock Market, where Facebook is listed, had problems sending electronic messages back to the brokerages that handle orders from individual, or “retail,” investors, according to people with direct knowledge of the situation.
Because the electronic acknowledgements didn’t come back from the exchange, the brokers were unable to tell their clients that trades had been executed. Such acknowledgements usually occur almost instantaneously.
“Nasdaq’s delay in passing back executions is causing a lot of heartburn on the Street,” said one source. “We had to tell clients we didn’t get the print back,” said another.
READ MORE: Facebook investors left guessing after Nasdaq glitch
Why did Facebook buy Instagram for $1 billion?
The price was stunning for an apps-maker without any significant revenue, even when measured by the lofty standards of Silicon Valley, where startup valuations have soared in recent years. It highlights the rising stakes in the social networking market in which services such as Facebook need to constantly excite consumers with new features and mobile applications.
By acquiring Instagram - in a deal announced days after the startup closed a funding round that valued it at $500 million - Facebook may also have sought to absorb a potential rival or at least prevent it from falling into the hands of a major competitor like Twitter or Google Inc.
“Anytime you see a social platform that’s growing that quickly, that’s got to be cause to be nervous,” said Paul Buchheit, a partner at the start-up incubator program Y Combinator and a co-founder of FriendFeed, which Facebook acquired in 2009.
“It would be better to have bought Twitter at this stage,” he said of Facebook. “So if you’re thinking this could be the next Twitter, it could be a smart thing to do.”
READ MORE: Facebook acquires two-year-old app Instagram
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