Facebook Initial Public Offering (IPO) Fiasco

Facebook had agreed that NASDAQ would be in charge of their Initial Public Offering (IPO) not knowing that NASDAQ did not have the adequate capacity to take on the IPO. This was due to a technological glitch that resulted in a loss for Facebook.

National Association of Securities Dealers Automated Quotations (NASDAQ) started trading 40 years ago. The objective of NASDAQ was to create a way for investors tobuy and sell stocks on a computerized, transparent, and fast system. This would eliminate the burden and inefficiency of in-person stock transactions, which had been the prevalent model for nearly a century. The NASDAQ believed that investors could make more money by closing the price gaps between buyers and sellers, and technology had evolved enough at that point to make it happen. Given NASDAQs’ experience, they were in charge of Facebook IPO. It was a debut for the social network company. The IPO went horribly wrong because of the hasty decisions made by NASDAQ.

 What went wrong and the outcome

There was a widespread anticipation that the Facebook IPO would be among the largest in history with huge numbers of investors participating, a design limitation in Nasdaq’s system to match IPO buy and sell orders caused disruptions to the Facebook IPO.

The issue was that about 30,000 Facebook orders became stuck in Nasdaq system. Investors were unsure whether purchases went through as Nasdaq tried to work through the glitches and delays in their system. This issue caused by NASDAQ shows how poorly their designed systems were and the hasty decision making not only disrupted one of the largest IPOs in history, but produced serious and pervasive violations of fundamental rules governing the stock markets NASDAQ had made a series of ill-fated decisions that led to the rules violations. They didn’t do a proper check of their systems. NASDAQ took a decision to proceed, thereby allowing Facebook shares to change hands in secondary-market trading despite the exchange’s lack of full understanding of a system limitation caused more than 30,000 Facebook orders to remain stuck in NASDAQ’s system, preventing their proper execution. The aftermath of this event was that Facebook, which went public onMay 18, 2012, saw its share price tank right off the bat, with investors unclear on whether their trades had gone through. The shares that had opened on a high note of $42 a share on May 18, the stock closed at $38.23 in its first full day as a public company, and went on to decline in value for several sessions after that, closing at a low of $17.73 by September. Shares of the $57 billion company were reduced to about  $23.60 a share. NASDAQ was eventually fined $10m by SEC.

The decisions to have been taken

Decisions NASDAQ could have taken NASDAQ should have taken the game theory approach, taking into cognizant the views of other parties involved before taking such a rational decision. They should have ensured that their systems and processes could handle an IPO adequately, without causing any disruption to the market. If their systems were not ready, they should have postponed the Facebook IPO. NASDAQ should have added safeguards, worked on the improvement of their trading technology and performing their legal obligations before undergoing the Facebook IPO. NASDAQ should work on the safety and soundness of their market.

Given Facebook’s presence in social media, and being a big company, they should have done their market research very well before going through with the IPO. Technological glitch caused them a huge loss. This would have been prevented with proper Internet marketing analysis to determine the marketing performance of NASDAQ, which would have made their Return on Investment better off.

In Your Best Life Now, the book basically talks about how one can reach its potential in life through a seven-step process. The book begins by addressing the importance of dreaming big, which was referred to as “enlarging your vision” and “raising your level of expectation”. From there the book moves on to explaining the value of a healthy self-image, the importance of a proper mindset, and how-to selectively choose your thoughts and deal with disappointment. The book offers insight on dealing with challenges, the importance of giving, and choosing to be happy.

I learnt from the book on how to find the good in almost every situation. Regardless of discouraging circumstances or challenges, there are things to be grateful for: people, relationships, opportunities and talents. The book explains that much of life is routine, we can stir up a fresh supply enthusiasm within ourselves. It’s not momentous events in our lives that ignite enthusiasm, nor even perfect situations. Rather, enthusiasm springs from choosing to look for grace and blessings in our lives. Making a habit of living with gratitude and searching for good can open one’s life to positive, life-changing opportunities. While cultivating discipline as a key attitude towards life.

In this book, the first step to living at your full potential is to enlarge your vision. To live your best life now, you must start seeing your dreams coming to pass. You must conceive it and believe it is possible if you ever hope to experience it. To “conceive” it, you must have an image on the inside, of the life you want to live on the outside. The image has to become a part of you, in your thoughts, your conversation, deep down in your subconscious mind, in your actions, in every part of your being.

An old adage purports that if you want to be successful, you must follow your dreams. While I’d never suggest that anyone should abandon his or her dreams, the truth is, your life will follow your expectations. What you expect is what you will get. If you dwell on positive thoughts, your life will move in that direction; if you continually think negative thoughts, you will live a negative life. If you expect defeat, failure or mediocrity, your subconscious mind will make sure that you lose, fail or sabotage every attempt to push above average. The key element to enlarging your vision is raising your level of expectancy. One has to change his or her thinking before one can ever change his or her living. It’s important that you program your mind for success. That won’t happen automatically. Each day, you must choose to live with an attitude that expects good things to happen to you. Start expecting doors of opportunity to open for you. Expect to excel in your career. Expect to rise above life’s challenges. How we see ourselves will make us or break us. It’s important to understand that you are already equipped with everything you need to live a prosperous life; you’re filled with possibilities, incredible potential, creative ideas and dreams.

 From the book, it shows that our mind is similar to a computer. What you program into it dictates how it will function. How foolish it would be to complain, “I hate this computer! It never gives me the right answer; it never does what I want it to do.” Think about it: you can have the most powerful computer in the world, but if you program it with the wrong software or with misinformation, it will never function as the manufacturer intended.

From the book, I discovered that happiness is a choice. You may be tempted to think that your best life is still a long way off. Actually, nothing could be further from the truth. Your best life starts today! The final step to enjoying your best life now is to choose to be happy today. You don’t have to wait for everything to be perfectly straightened out in your family or with your business, or for all your problems to be solved. You don’t have to forgo happiness until you lose weight, break an unhealthy habit or accomplish all your goals. No, you can be happy right where you are. Happiness is a choice. When you get up in the morning, you can choose to be happy and enjoy that day, or you can choose to be unhappy and go around with a sour attitude.

You must learn to live one day at a time. By an act of your will, choose to start enjoying your life right now. Life is too short not to enjoy every single day. Lets all learn to enjoy our family, friends, health, work; lets enjoy everything in our lives.

An important point I took out of this book is that a relaxed attitude will not only lengthen your life, it will make it much more enjoyable.

Its winter again and Canadians heating their homes with natural gas should expect to spend slightly more this year than they did last year. On the other side consumers of electricity and heating oil are not likely to experience any sizeable increase.

The rise in demand for natural gas or during winter months is primarily driven by one key variable, the weather. Heating demand necessities usually should be average to below-average, based on normal temperature expectations in Canada, with varying temperature forecast for the West and East Coast. Below-normal temperatures for the West Coast and above-normal temperatures for the East Coast.

Prices are usually forecasted to average between $2.90 – $3.40 per Gigajoule at Alberta and US$3.25 – $3.75 per million British Thermal Units (MMBtu) at Henry Hub. This is a slight increase from last winter’s prices. In Ontario, prices are expected to be comparable to last winter, averaging between US$3.40 – $3.90 per MMBtu.

Canadians using heating oil to heat their homes this winter should expect to pay between $1.10 and $1.30 per litre, or about the same as last winter. This is due to the fact that the largest heating oil markets are on the east coast, the major factor affecting heating oil prices is the price of seaborne crude oil which is also expected to be similar to last winter.

Also, ongoing geopolitical tensions in the Middle East and North Africa could impact the supply of crude oil, which could have an adverse effect in price fluctuations. Inventory levels of crude oil and petroleum products in the U.S., Europe and Japan are near 20-year lows. Such low inventories could translate to increased price volatility in the presence of supply interruptions or refinery outages or strikes.

Stability in crude oil price forecasts and consistent inventories of gasoline both suggest that Canadians will not pay much more than they did last year when filling up at the pump. The retail price for a litre of gasoline in Canada is forecast to be in the region of $1.15 and $1.35.

Alberta and Ontario wholesale electricity prices are forecast to remain close to last year’s winter levels. Prices in Alberta are expected to average between $80 and $90 per MW.h over the winter months. Residential electricity rates have been on the increase somewhat in almost all provinces in 2013 and further price increases are scheduled for 2014. This is attributed to the need to replace aging infrastructure and also the cost of new generation put upward pressure on electricity prices in Canada.

This forecast that propane prices this winter will be at a level similar to that of last year, ranging from 25 – 35 cents per litre. The increase in propane prices in comparison to last winter is primarily driven by higher WTI (West Texas Intermediate) prices this year.

Propane stocks in Canada and the U.S. were high as indicated at the end of October, as propane production in south of the border continues to grow, which is supported by rising production of liquids-rich shale gas. Though U.S. propane exports are on the increase due to the growth in U.S. supply and higher overseas propane prices versus the U.S., this likely indicates that propane stocks in North America are sufficient to cover the expected incremental winter demand.

The NEB which is the independent federal regulator of key areas of Canada’s energy industry. Part of its objectives and goals is to regulate pipelines, trade and energy development where necessary in the Canadian public interest. NEB also monitors the supply of all energy commodities in Canada.

I pride myself on being an aspiring, enterprising and purposeful individual. I always set goals for myself and do my utmost best to achieve them. I see challenges and setbacks as avenues to re-strategize and apply an approach that could be solve such challenges that would be beneficial to the community.For example, my country of origin, Nigeria is faced with many socioeconomic issues such as inadequate Health facilities and bad roads which led to many deaths from road traffic accidents. Nigeria has the second highest road traffic accidents fatalities out of 193 countries in the survey. She records 162 deaths per 100,000 in road accidents. Those mostly affected are the energetic ones between the age group of 15 to 45 years old. The need to reduce this trend, led me to join the Angels on Mission Initiative to make an impact to the communities by providing healthcare for patients under an emergency life line and related medical service regardless of their inability to pay.

The most tragic situation today are the young and educated people dying daily due to the fact that there is little in which the government alone can do to care for these victims. I was able to make an impact by helping patients who couldn’t afford to pay or unconscious to even disclose their identity pay the required fee for the emergency treatment. The objective was to save in emergency situation. I was also able to enlighten the communities by teaming up to provide multi-sectorial sustainable programs that bridge emergency relief and long term development at the grassroots level.

Another substantial community achievement  was participating in a mentoring and tutoring program that created opportunities for the recipients to obtain a High School and college education. Shortly after I started my banking career in UBA, I joined a group of people offering community service on education to the rural poor in the community. During this period I realized how difficult it was for children of the downtrodden to acquire basic education, talk more of obtaining a college degree. To assist these kids, I started allocating part of my time each weekend to tutoring and mentoring these students. I also took two young students under my care with the goal of helping them pass the national college entrance exam that would qualify them to into universities. After a year of hard work, we succeeded. The students passed the national college exam and won the government scholarship into college. Today, they have graduated out of college. Their success is part of my accomplishment because today they act as icon of hope to other less privileged children. I believe it is always better to give to the community and also impact lives that could positively affect generations to come.

No matter how I tried to ignore it – it was a continuous tug at the very heart of my existence. Time and again, I would say to myself and reaffirm consciously that I would have nothing to do with the “oil and gas industry” in Nigeria. This stemmed from the impression that I had during my teenage years – from the obscene pictures of burnt people scooping premium motor spirit from worn-out oil pipelines.

It is unfortunate to note that my country’s situation has not changed much in the past decade. Although, there have been improvements in some sectors, but overall there is still an obvious dearth of excellent methods in the areas of management, especially – operations. This is largely due to the lack of well-trained professionals. Based on my training, and my new outlook towards the “Oil and Gas” industry in Canada, I intend working as a Supply Chain and Marketing professional in the Oil and Gas industry in Canada gaining relevant experience and knowledge that could be applied to my native home, Nigeria.

Canada’s oil and gas industry has been attracting opportunities for jobs and investment for the past decade. This led to increasing investment in 2012. In addition to considerable interest and investment in exploring the potential for liquefied natural gas (LNG) exports from British Columbia, there was an acceleration of oil sands development in Alberta. Saskatchewan saw growth in light and heavy oil production. In Nova Scotia, Deep Panuke offshore gas project is expected to be in production later this year. In Newfoundland and Labrador, the Hebron offshore oil project moved into the development and construction phase, and is targeted for production in 2017.

Three key factors will drive demand for direct oil and gas workers over the next ten years including industry activity levels, age-related attrition and workforce competition would see the industry employ more hands in the coming years. Over C$60 billion in oil sands related projects have been proposed. Approximately C$20 billion has been invested to-date in completed projects. The key players in the industry are Shell, Suncor Energy, Transcanada, Total, Imperial Oil and Nexens.

Presently, with the demand in the U.S. flattening, Canada is at or near pipeline and processing capacity for present exports with no infrastructure for increased Canadian oil production to the south, west or east. A number of factors pose likely or imminent challenges to the Canadian oil industry, including the current inability to obtain market prices; decreased demand for Canadian oil due to increased U.S. production; environmental opposition along proposed pipeline routes to the west and south; and the resistance of the British Columbia government toward planned oil routes. While Canada faces energy export challenges attributed to infrastructure and diminishing U.S. demand, there is a significant opportunity to capitalize on the many returns offered by a country endowed with abundant resources that exceeds the in-country demand. I see myself contributing my quota to the efficient running of the operations of the Oil and Gas industry in Canada.

Sources: Petroleum Human Resources Council of Canada; National Energy Board and Pwc

There are no shortcuts to any place worth going, the difference between those who end up thriving in their careers and those who do not, often comes down to people’s ability to get through the various difficulties they have had, and come out on top.” – Beverly Sills. The meaning of this to me is that you can choose to be whoever you want to be in this life.  You can constantly improve and reach your peak.

I started my professional career with Africa’s global bank, United Bank for Africa in Nigeria. I worked in the Corporate Banking Directorate of the bank as a Relationship Manager managing corporate clients in the Manufacturing and Telecommunications sector for five years. I also worked on finance and monitoring of key Manufacturing client distributors nationwide.

Besides working for United Bank for Africa, I joined the Angels on Mission Initiative, a Non-Profit Organisation with the focus on reducing disability and saving road accident victims in Nigeria. I have been contributing towards paying hospital bills of accident victims and saving lives.

I have always planned to study for an MBA degree. While at University, I confirmed I will like to manage a business so my choice of Economics as a first degree indicated my desire to fully understand the rudiments of business management and operational efficiency in an organisation.  In the last five years, I have developed effective communication and excellent interpersonal skills while managing relationships in manufacturing and telecommunications sub verticals. With a quest to always add value to a client, I now intend to take my career to a global level and get a global exposure of the western economy which I lack. I assume my business background is not enough to help me achieve my short term goal of working as Supply chain professional in the western economy, thus the reason for Sauder MBA.

At Sauder, the first year academic experience will prepare me for a summer internship in a global energy firm where I would get experiences in Supply Chain Management and Marketing. Post MBA, I seek to work as Supply Chain professional. I also hope to develop my professional skills through the Product Service Management track and also get the opportunity to work with very smart groups of students that are attracted to Sauder yearly. The summer internship will give me an opportunity to put in practice what has been taught in the lecture room. I am particularly keen to engage with the diverse groups of classmates in my section, as I am sure to learn the different ways of approaching and handling team dynamics; a necessary skill for business leadership. With Sauder School of Business’ international reputation with a large and accessible alumni network, I am confident that I will accomplish my goals with the Sauder MBA.