Monday 19 February 2018

NYSE does Twitter IPO dry run after Facebook problems

John McCrank

THE New York Stock Exchange (NYSE) did a test run of Twitter's highly anticipated market debut, as it seeks to avoid the types of problems that plagued Facebook's initial public offering on rival Nasdaq.

The Big Board regularly does systems testing on the weekends, but this was the first time it had run a simulated IPO, and it did so at the request of its member firms – many of whom took part in Facebook's 2012 IPO on the Nasdaq main exchange.

The NYSE was testing mainly for two things: To see if its systems could handle the amount of message trading that might be generated by the IPO; and to make sure that once the IPO took place, any firms that placed orders would promptly receive the reports telling them that their orders had been executed.

It can also be seen as part of NYSE's struggle with Nasdaq for supremacy in technology listings. Both exchanges vied to be home to Twitter's stock, and many analysts said the trading disruptions that occurred on Facebook's Nasdaq debut likely played to NYSE's favour, as it tries to become the destination of choice for technology listings, something Nasdaq once dominated.

Twitter, which intends to sell 70 million shares at between $17 (€12) and $20 each, will be holding the biggest Internet IPO since Facebook, which sold a much larger 421 million. Twitter is expected to start trading as early as November 7.

In the case of Facebook, the tremendous volume of orders on the first day of trading exposed a glitch in Nasdaq's system, ultimately preventing timely order confirmations for many traders, leaving them unsure about their exposure for hours. (Reuters)

Irish Independent

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