Facebook Pokes Nasdaq — And Not in a Nice Way — In Veiled Threat to Stock Exchange
It’s called a warning shot, and Facebook just let a doozie of one fly at the Nasdaq Stock Market, via a clever pair of articles in two major media outlets.
Yesterday, the New York Times reported that Facebook is seriously considering dumping Nasdaq for the New York Stock Exchange.
The reason, according to the Times: “[T]he relationship has soured.”
You’re kidding? Say what? (That’s a little like saying you were surprised when CNN’s Anderson Cooper revealed today that he is gay.)
Among the gripes that the social networking giant has against the electronic stock exchange giant, in the wake of its infamously screwy IPO in May:
- The technologically bungled opening day.
- Delayed trades that then junked the stock when they were suddenly released all at once that same day.
- Nasdaq telling investors that it would pay them off too soon on the second day of trading.
- Ensuing shareholder lawsuits.
And, perhaps most of all, crappy communications in the crisis from Nasdaq CEO Robert Greifeld, who has made an ongoing series of dopey remarks. That includes saying its obvious screw-ups had not impacted Facebook’s share price.
Despite Greifeld’s recent visit to Silicon Valley to soothe Facebook’s management ire, the Times wrote: “Tensions remain so high that Facebook is still considering switching exchanges and is weighing the costs of such a move.”
But, hold the phone, then came an oh-God-it’s-Sunday-night-and-now-we-have-to chase-the-Times story in The Wall Street Journal — titled “Facebook to Remain on Nasdaq” — noting that the company execs had already moved past anger and were now into forgiveness.
The Journal noted that, while still plenty irked, “they determined a move would further drain confidence in the company’s battered shares” and “while the company considered a switch in the days after the IPO, Facebook had decided by mid-June to stay put for now.”
The first part is certainly true — Facebook management is worried that a such a quick move away from Nasdaq would hurt the company more than it would feel good to strike back and move to the NYSE.
“Is it a good idea to do this in the midst of all the volatility?” asked one source close to the situation. “Probably not immediately, but it is still a very serious consideration.”
In fact, numerous sources I spoke to also agreed that while it might not happen right away, Facebook has not yet made a definitive decision one way or another to stay or go.
Instead, it is opting to warn Nasdaq strongly, while sending up trial balloons to investors to gauge the impact on its stock and assessing what the NYSE can offer.
As the Times noted, using an apt Facebook status update metaphor: It is complicated.