By now you know that Facebook’s stock didn’t pop in its first day of trading, closing the day at $38.06. Reports emerged yesterday that trading didn’t begin until 11:30 EDT because of computer glitches on the NASDAQ. Investors were left waiting for computer confirmation on their orders and the price they paid for the stock. The NASDAQ’s automated system relies completely on computers that are supposed to be faster and more efficient than human traders.
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Keith Bliss from Cuttone & Co. explained the human trading system on the NYSE in an interview with Bloomberg:
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“There is no redundancy inside their (the NASDAQ) market so they’re solely dependent on the computers being able to handle…what’s happening not only inside of the market, but also inside an IPO. Down here on the New York Stock Exchange, we have redundant systems and the redundant systems are the human-based traders who can have an open outcry auction market. If the systems go down, we can get the stock open and get orders into the market, they can execute them and can give you a report immediately.”
In Silicon Valley, we keep hearing that computers are getting closer to replacing humans as processors get more powerful. Researchers are continuing to work towards the singularity, in which we create computers that are smarter than humans (and probably more powerful too — cue a robot uprising).
While it will be decades, if not hundreds of years, before a computer has even close to processing power of the human brain, leaders in the industry are praising computers as faster and smarter than human beings. It’s ironic then that the largest tech IPO in U.S. history may have been hurt by computer-based system.
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