Twitter IPO at NYSE: What Can Go Wrong?

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Oct. 25 (Bloomberg) -- Bloomberg senior markets desk correspondent Julie Hyman explains the difference in how the NYSE and Nasdaq handle an IPO and what could potentially go wrong in launching the stock. She speaks on Bloomberg Television’s “In The Loop.”

The new york stock exchange handle their ipo's differently?

You heard that they are shopping out shares.

At the nasdaq, it is handled pre-trading.

The biggest difference is you have order flow coming ahead of time, but you also have humans involved, few of them, there on the floor of the new york stock exchange.

You also have the person that will open the stock and decide at what price, then, of course, trading begins.

What could go wrong?

The order volume could be too high and overwhelm the system.

There could be excessive price volatility in the first moments of trading that could cause problems with the system -- routing glitches, intentionally.

That is what we have seen.

It is tough to test every scenario.

We should mention the new york stock exchange is conducting testing tomorrow with various firms that might be participating in the public offering.

In talking with experts, they said you have to test, but it is difficult to test every single potential scenario.

I spoke to jim angel, a finance professor at georgetown, and he said when you have the initial public offering, one of the issues is not necessarily the size of the order -- the order volume overall -- it might be the number of orders.

This could be the same number as one million, but if you have so many orders coming through, that could clog the system.

The nasdaq ceo said that facebook problem was a software glitch.

In the end, we should point out perspective.



-- size could matter.

Twitter is much smaller.

70 million shares versus 421 million shares.

That is the perspective when he you are looking at what could go wrong -- when he you are looking at what could go wrong -- when you are looking at what could go wrong.

Thank you, julie hyman.

This text has been automatically generated. It may not be 100% accurate.


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