Scottrade freezes on Facebook demand

Twitter erupts with angry customers as a number of brokerage clients see problems.

By Benzinga May 18, 2012 5:33PM

By Brett Callwood, Benzinga Staff Writer

Facebook's (FB) market debut Friday was marred by structural hiccups and high demand, frustrating investors whose trades didn't go through smoothly.

Investors using Scottrade took to Twitter to voice complaints about the trading process. One Twitter user, @ResearchTrading, said the brokerage was holding Facebook orders for more an hour. Phone calls were apparently not being answered.

Other traders, including one who tweets as @SunnyDC2, were waiting 45 minutes to an hour and still seeing orders listed as open and not completed.

Scottrade spent much of the day encouraging people to use its mobile app. Trader Lyle Pratt threatened to switch online brokers, and Scottrade responded by asking if he was using the mobile app.

People were left not knowing if they owned Facebook shares or not -- especially frustrating given Facebook's volatile trading and sky-high demand. Facebook opened at $42.05, and closed near its $38 IPO price after a day of ups and downs.

Still, according to Twitter user Stan Morris, Scottrade reps said they have never seen their call center so busy, not even when the market crashed a few years ago.

Scottrade confirmed to Benzinga that some clients did see pending order status messages. "The cause was due to delays NASDAQ was experiencing -- and not with Scottrade's trading sites," the company said. "Scottrade's trading sites were up and running this morning and continue to be available."

Nasdaq seemed to be plagued with problems from the start. Facebook was originally scheduled to begin trading at 11 a.m. ET, but didn't start until 11:30 a.m. A trading bottleneck may have contributed to the stock's early decline from $42.05 to $38 within the first 30 minutes.

More from Benzinga
May 18, 2012 6:09PM
People are so predictable (all trying to pile into Facebook at the same time).  What fools.  Meanwhile, the rich get richer and the fools are soon parted from their money. 
May 18, 2012 8:15PM
Same here as koolaid and Mandy. Order delayed. Folks got scared. I couldn't cancel and couldn't see what I paid. Bought at 42, sold at 38.50. I think there could be a law suit against NASDAQ or the brokerages on this. We were sitting blind and could've got out sooner. Oh well experience is the best teacher, and the most expnsive. 
May 18, 2012 7:11PM

Put in an order at 8:00am on ING.  By 8:40, nothing, so I put in a cancel.  Nothing.   Less than 60 seconds after the market closed, my trade confirmation just happened to show up (what timing). The price?  $42.00 per share, which means the trade executed immediately upon opening.  Nasdaq said they had all trade backlog completed around 2:15pm EST.   What happened until 4:00:37 EST when ING said my order was filled?

May 19, 2012 1:19PM
Schwab has a toll free # for placing a trade or talking to an agent. They could have answered your question. Don't depend on the internet 100%.  Buying during a buying frenzy AND when the insiders are SELLING is never a good idea. Remember that.
May 19, 2012 8:39AM

Schwab grinds to a halt and provide anything except an orderly market!

On May 17 I placed a limited order of $45. The order was not filled when the stock opened. I arrived back at my home around 12 noon on the May 18 the order was not filled at that time. I cancelled the order at that time.

It was being reported on CNBC and other the Underwriters were being asked to step in to prevent or prop up the stock from falling below it original $38

I received a Trade Notification from Schwab well after the Cancel Order which was accepted by Schwab from my Computer. This was received on 5/18 at 1:13 PM well after the cancellation order. I noted the confusion and the lack of not stopping trading this stock, I sent another Email requesting a roll back of the Trade Notification, received at 1:13.

This morning I note I received a Trade Confirmation on 5/19 4:43 AM, It states I purchased my shares at $42 when the share closed at $38.23.

If the stock opened at 42.05 and closed at $38.23 this is a loss of value $3.82 per share, not the $.23 gain being reported on this page by MSN Money. 

 This is not orderly; the SEC should have stepped in and closed the trading on FB. The brokerages houses should have stopped trading FB.


May 19, 2012 6:02PM
I bet you clowns who bot FB at $38 or whatever price are pretty happy you own a business selling at 100 times earnings with a kid running it.
May 18, 2012 5:55PM
This happened to me.  I have no idea whether I own shares or not.  I guess I need to switch to a "real" brokerage like Merrill Lynch.
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