THE TRAIL of losses and lawsuits stemming from Facebook’s botched float in May got longer yesterday, as one of the market-makers on the initial public offering said it was considering legal action to recoup its losses.
Knight Capital, one of four market-makers on the £10bn float, revealed its plans after its quarterly earnings plunged 81 per cent due to a $35.4m loss on the share issue.
Facebook and stock exchange Nasdaq are facing a raft of civil claims over a glitch on IPO day that saw trading orders delayed by up to 30 minutes, plus complaints about the social network’s growth forecasts ahead of the float.
In total, market participants lost an estimated $200m because of the malfunction.
“We are evaluating all legal rights and remedies in connection with the Facebook IPO,” said Knight Capital chief executive and chairman Thomas M Joyce.
Knight had to compensate its clients for the glitch, and also suffered its own trading losses in the first two hours the Facebook shares traded.
Knight was one of the four major market makers in the Facebook deal, along with Swiss bank UBS, Citigroup’s Automated Trading Desk and Citadel Securities.