(Bloomberg) — Nasdaq OMX Group Inc.s accidental early release of Twitter Inc.s earnings may tarnish the stock exchange operators efforts to diversify as it faces increasing competition in its core business as a trading venue.
Nasdaq unit Shareholder.com accidentally posted Twitters earnings release on the Twitter website for 45 seconds Tuesday about an hour before the results were due to go public. The mistake caused Twitters stock to drop and led to a trading halt in its shares. The companys services quarterly results were then officially published during the days trading session. Twitters shares closed down more than 18 percent.
In October, Shareholder.com prematurely released JPMorgan Chase & Co.s third-quarter earnings. Investors also still remember the delayed opening of Facebook Inc.s debut in 2012, and an incident in August 2013 when trading in all of Nasdaqs listed companies was stopped for more than three hours after a malfunction of its Securities Information Processor, said Larry Tabb, chief executive officer of research firm Tabb Group LLC.
This pre-release of Twitters earnings was not good for the brand, especially after Facebook and some of the challenges with the SIP, it doesnt help, Tabb said. They are an exchange and theyre held to a higher level of scrutiny and so its critical for them to get this right
The embarrassment comes as Nasdaq faces increasing competition for trading and listings from Intercontinental Exchange Inc., the owner of the New York Stock Exchange, and Bats Global Markets Inc., which overtook Nasdaq earlier this year as the second-biggest exchange operator in the U.S. by trading volume. The NYSE has snagged technology companies such as Twitter and Chinas Alibaba Group Holding Ltd., an area that Nasdaq had long dominated.
Twitters shares began plunging at 3:08 p.m. New York time, falling as low as $48.06, a 7 percent decline from the prior days close. They were halted 20 minutes later. Trading resumed after about 20 minutes, during which time the company officially released its results. After the resumption, the stock fell more than 20 percent, ending the session down 18.2 percent, due largely to revenue and an earnings forecast that fell below analysts estimates.
The posting was caused by an operational issue that exposed the release on Twitters IR website for approximately 45 seconds, Nasdaq spokesman Joseph Christinat said in a telephone interview. During those seconds the site was scraped by a third party that publicly disseminated the earnings information. We regret the incident.
Seven months ago, JPMorgans third-quarter results were published more than three hours ahead of schedule, appearing online at about 3:30 a.m. in New York. The bank had set 7 a.m. for release of the market-sensitive data.
The root cause was a human error internally at Shareholder.com, Ryan Wells, a Nasdaq spokesman, said in an e- mailed statement at the time.
