Facebook Looking to Relocate to New Exchange?

By: Kuljit Grewal  |   June 18th, 2012   |   News, Social Media

According to several sources including heavy hitters Reuters and Bloomberg news, Facebook may be in talks with NYSE Euronext, Inc., who operate the New York Stock Exchange regarding a possible move from NASDAQ. Although thus far the reports have been vehemently denied by representatives from NYSE, as is often the case, where there is smoke there is usually fire.

 

The news comes on the heels of Facebook’s highly anticipated IPO which garnered historical figures, but has been plagued by opening delays and lackluster trading results. The share price for the social networking giant has fallen more than 15 percent from the $38 IPO price to close at $32 on May 23, 2012.

 

According to the aforementioned sources, phone calls and emails have been exchanged between both parties although such a move would be highly unorthodox given the new car smell still on the IPO as well as how rare it is for a company to switch exchanges.

 

Tensions have been mounting between Facebook and their current bourse NASDAQ following an embarrassing opening delay and the less than stellar results that seem to be commonplace for newly minted tech IPOs these days. Although NASDAQ has long been considered the choice of high tech companies, losing the name value of a Facebook regardless of share price would be a huge loss for one party and a gain for another.

 

As it stands now, things could go from bad to worse for Facebook as shareholders have filed multiple lawsuits against the company and their underwriters for what is being cited as the concealing of key financial information regarding declining revenue figures and growth projections.

 

The Securities and Exchange Commission (SEC) is also looking into these matters. If the allegations are found to be true, it could have a significant effect on Facebook as well as other large tech IPOs moving forward.