Monday, May 28, 2012

Did a rogue "algo" ruin the Facebook IPO?

Really interesting (also, complicated and confusing) article out about a glitch in the NASDAQ system that may have stifled the Facebook IPO, preventing the expected "pop" in share prices from occurring and possibly leading to billions of dollars evaporating into the nether.

Tyler Durden: SkyNet Wars: Presenting the Rogue Algo Responsible for Facebook's Downfall

Markets today are impossibly high tech, interconnected, and controlled by complex algorithms that are created by people but operated at such high speeds that, when things go wrong, allow problems to spiral out of control in seconds. Billions of dollars can be lost (or gained) before anyone even knows what happened. Later investigations (like the one the SEC has launched into the Facebook IPO "glitches") are incapable of repairing the damage that was done and generally fail to address the issues that led to the problems in the first place.

What's the solution? Stock up on water. Prepare for the terminator apocalypse.

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