Report: UBS Lost $350 Million on Facebook IPO, Prepping Suit Against Nasdaq
The botched opening of Facebook’s public debut May 18 and the poor performance of the stock in the after-market have created a lot of losers, but perhaps none more so than UBS according to a report from CNBC Friday.
The cable network’s Maria Baritomo reported that the losses at the Swiss bank are as high as $350 million, and that UBS is preparing a lawsuit against Nasdaq OMX Group, which has been maligned for technical glitches that delayed the opening of Facebook shares on the company’s first day of trading. The bank was not an underwriter on the Facebook IPO.
A UBS spokesperson offered the following statement: “Given the size of our US Equities business and our role as a major market maker, UBS was affected by these issues, as we believe other market participants may have been. Consistent with our policy on market comments on our positions or intra-quarter performance, we are not disclosing the amount of the loss, which is not material to UBS. We are continuing to consider avenues to recover our losses in this matter, but have not yet taken legal action.”
Bartiromo’s sources say that when UBS did not receive confirmations of order executed — a flaw that affected a number of Nasdaq customers — “it repeated the order multiple times and was left with much more than it intended.”
While the scale of the reported loss is far bigger than any others disclosed to date, UBS is not the only firm dealing with losses as a result of the Facebook flub by Nasdaq. Knight Capital Group has disclosed a $30-$35 million loss and reports have also touched on losses at Citadel and Citigroup. (See “Facebook Fallout: Knight Says It Lost Millions On IPO, Blames Nasdaq.”)