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Facebook market makers’ losses total at least $100 million

Posted By admin On May 25, 2012 @ 3:14 am In Money Watch | Comments Disabled

Jessica Toonkel and John McCrank
Reuters [1]
May 25, 2012

Claims by four of Wall Street’s main market makers against Nasdaq over Facebook’s botched IPO are likely to exceed $100 million, as they and other traders continue to deal with thousands of problems with customer orders.

A technical glitch delayed the social networking company’s market debut by 30 minutes on Friday and many client orders were delayed, giving some investors and traders significant losses as the stock price dropped. The exchange operator is facing lawsuits from investors and threats of legal action from brokers.

Four of the top market makers in the Facebook IPO — Knight Capital, Citadel Securities, UBS AG and Citi’s Automated Trading Desk — collectively have probably lost more than $100 million from problems arising from the deal, said a senior executive at one of the firms.

Knight and Citadel are each claiming losses of $30 million to $35 million, potentially overwhelming a $13 million fund the exchange set up to deal with potential claims.

Nasdaq also has to contend with the outside prospect that it could lose the Facebook listing entirely after having just obtained it.

Full article here [1]

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URLs in this post:

[1] Reuters: http://www.reuters.com/article/2012/05/25/us-facebook-fidelity-thousands-idUSBRE84N10120120525

[2] And Now Facebook’s Bankers Are Divvying Up The $100 Million They Made Shorting Facebook’s Stock: http://www.prisonplanet.com/and-now-facebooks-bankers-are-divvying-up-the-100-million-they-made-shorting-facebooks-stock.html

[3] Corporate Media Spotlights Distortion of Market by High Frequency Trading: http://www.prisonplanet.com/corporate-media-spotlights-distortion-of-market-by-high-frequency-trading.html

[4] Financial market losses could top 1,600 billion dollars: report: http://www.prisonplanet.com/financial-market-losses-could-top-1600-billion-dollars-report.html

[5] Small Chinese Company Tells Goldman To Take A Hike, Refuses To Pay $80 Million In Derivative Losses: http://www.prisonplanet.com/small-chinese-company-tells-goldman-to-take-a-hike-refuses-to-pay-80-million-in-derivative-losses.html

[6] JP Morgan Suffers ‘Massive’ Losses: $4.2 Billion Probable; May Spread to Entire Sector: http://www.prisonplanet.com/jp-morgan-suffers-%e2%80%98massive%e2%80%99-losses-4-2-billion-probable-may-spread-to-entire-sector.html

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