BLOG: Will Nasdaq Lose the Twitter IPO Thanks To Its Systems Glitches?

The Twittersphere lit up like a pinball machine late yesterday as the microblogging site announced – in a tweet, naturally – that it had filed for its initial public offering.

So far, the details are few yet noteworthy: Goldman Sachs will underwrite Twitter’s IPO and the social media site is keeping mum about its financials, thanks to the newly passed JOBS Act. Firms with revenue of less than $1 billion do not have to reveal its financial sheets until it starts its full marketing push before the shares are traded.

But there’s a burning issue that will have an impact on investors and traders alike: Will Twitter trade on Nasdaq or the New York Stock Exchange?

With its recent trading technology glitch that suspended trading of shares in mid-August, Nasdaq might not be the first choice for Twitter and its young team of tech-savvy owners. Also, the NYSE has a history of trading technology stocks and the NYSE’s systems did not screw up the Facebook IPO in May of 2012. That honor belongs to Nasdaq when the market maker’s systems could not handle the most hotly anticipated IPO since the Credit Crisis of 2008 and the dawn of Web 2.0. That faceplant also cost Nasdaq $10 million in fines once the dust settled and angry investors accused the market maker of losing them millions in potential profits.

As Traders Magazine reported yesterday, Mary Jo White of the Securities & Exchange Commission met with the leaders of the leading U.S. stock exchanges and ordered them to collaborate on ways to make their systems more resilient. According to news reports, Nasdaq CEO Bob Greifeld was 40 minutes late for the meeting with the SEC and his colleagues. That is not a vote of confidence for the CEO of the exchange that needs good news when it comes to its operations.

There is no word on which exchange Twitter will trade. But we can guess that the IT teams of Nasdaq – the men and women who keep the systems up and running – are getting a stern warning: Don’t mess this one up. And folks, say goodbye to your weekends. Instead of watching your kids’ soccer and football games you’ll be running trading drills until Twitter goes public.

Unless Twitter and Goldman Sachs give the rose to NYSE, of course.