Three weeks and about $40 billion ago, expectations for Facebook’s (FB) life as a publicly traded company ranged from modest to meteoric. Since then the stock is down 30%, the company is facing multiple lawsuits, and it has taken the dubious honor of owning the ugliest, most incredible reversal of fortune in Wall Street history.
Of course, the roots of Facebook’s insta-bubble were being sewn at least a year before its much-hyped debut, and the clean-up from this toxic IPO could take every bit as long.
While clearly acting out of self-preservation, the Nasdaq (NDAQ) has moved first to try and put the flop behind it by establishing a $40 million fund to make good with brokers and trading desks who got burned by chaotic and disorderly trading.
The plan was immediately dubbed inadequate by firms and unfair by its rival, the New York Stock Exchange (NYX). Still, market watchers like Hank Smith, the Chief Investment Officer at Haverford Trust, call the Nasdaq plan “a good PR move” that could mark a turning point for this debacle.