NYSE Experiences Data Malfunction Days Before Twitter IPOSam Mamudi
NYSE Euronext experienced two technical malfunctions during the first 40 minutes of trading, three days before it handles Twitter Inc.’s initial public offering.
All trades processed by the New York Stock Exchange and NYSE MKT were mislabeled on the industry’s main data feed as “sold” during the error, which was resolved at about 10:09 a.m. New York time today. NYSE Euronext also had trouble quoting shares, according to a statement. Bats Global Markets Inc., one of the four major U.S. stock market owners, briefly stopped sending buy and sell orders to NYSE during the error.
While neither malfunction stopped trading, the fault came three days before NYSE Euronext handles Twitter’s first day as a public company in the most-watched debut since Nasdaq mishandled Facebook’s initial public offering in May 2012. The NYSE error also followed mishaps last week at Nasdaq OMX Group Inc. and Deutsche Boerse AG’s International Securities Exchange.
“Nobody likes to have these issues, and I’m sure the exchanges are working as hard as they can to avoid them,” Ben Schwartz, the Chicago-based chief market strategist at broker Lightspeed Financial Inc., said in a phone interview. For Twitter’s first day of trading, “I would expect NYSE to be well prepared, especially after the previous mishaps.”
NYSE Euronext won Twitter’s IPO in October, beating Nasdaq for what’s set to be the largest U.S. technology debut since Facebook. A software error at Nasdaq delayed Facebook trading on May 18, 2012, leading to a $10 million Securities and Exchange Commission fine for the exchange and $41.6 million in claims from firms with losses.
Seeking to avoid similar trouble, NYSE Euronext has let brokers test its systems leading up to Twitter’s first day of trading. NYSE Euronext is poised to be acquired by IntercontinentalExchange Group Inc.
Rich Adamonis, NYSE spokesman, declined to comment today.
Winning Twitter was the latest evidence that NYSE’s ability to score listings from Internet companies has improved. Twitter follows Pandora Media Inc., LinkedIn Corp. and Yelp Inc. in picking NYSE instead of Nasdaq.
Twitter today increased the price of shares in its IPO by as much as 25 percent, putting it on track to raise $1.75 billion. The microblogging site is offering 70 million shares for $23 to $25 each, according to a regulatory filing today, indicating a market value of as much as $13.6 billion. Twitter had earlier proposed selling shares for $17 to $20 apiece.
NYSE’s error today was the latest in a series of computer malfunctions at the largest U.S. equity and options markets. Since Aug. 1, Nasdaq, Bats, CBOE Holdings Inc. and ISE have all experienced system issues that affected trading.
A Nasdaq error halted trading for thousands of U.S. stocks it lists on Aug. 22, while an NYSE subsidiary suffered an interruption that briefly stopped the entire U.S. options market on Sept. 16.
The frequency and severity of recent outages prompted SEC Chairman Mary Jo White to call the heads of the exchanges to a meeting in Washington on Sept. 12, where she ordered them to collaborate on improving the reliability of systems and developing better backups. NYSE Euronext Chief Executive Officer Duncan Niederauer said at the time that they had 60 days to report back to regulators.
The industry has made progress in meeting White’s demands, CBOE President and Chief Operating Officer Edward Provost told Bloomberg News on Oct. 4.