Nasdaq's Facebook glitch came from 'race conditions'
Nasdaq may pay out as much as $13 million due to a hard-to-find software bug
IDG News Service - The Nasdaq computer system that delayed trade notices of the Facebook IPO on Friday was plagued by race conditions, the stock exchange announced Monday. As a result of this technical glitch in its Nasdaq OMX system, the market expects to pay out $13 million or even more to traders.
A number of trading firms lost money due to mismatched Facebook share prices. About 30 million shares' worth of trading were affected, the exchange estimated.
On Friday, Nasdaq had delayed Facebook's IPO by 30 minutes. For about 20 minutes, the exchange stopped confirming trades placed by brokers, who were unable to see the results of their orders for more than two hours.
The problem stemmed from Nasdaq's IPO Cross, a pre-IPO auction process the exchange put in place in 2006 that allows traders to place orders and agree on an IPO price before the stock is officially launched, according to a Nasdaq statement issued on Monday.
Typically, in the minutes before an IPO launch, IPO Cross will run an auction in which traders can put in bids, and then calculate an opening price using these auction bids. The opening price would then be fed to the Nasdaq tape. After the opening price is calculated and just before it prints its opening price to the tape, IPO Cross checks to see if any additional orders have been placed since it started its calculation. In Facebook's case, additional orders kept coming in, which caused IPO Cross to recalculate the price multiple times, resulting in the delay past the 11 a.m. scheduled opening.
The problem was only fixed at 11:30 a.m., when Nasdaq switched to a backup version of the IPO Cross matching engine, which allowed the stock to go live on Nasdaq. Unfortunately, this secondary instance of the engine used calculations made at 11:11 a.m., ignoring any bids entered in the system since then. Also during this time, some customers did not receive order confirmations or had their connectivity from their own systems momentarily cut. Orders entered between 11:11 a.m. and 11:30 a.m. were not executed until after 11:30 a.m., resulting in trades that were not fully understood by brokers.
Nasdaq characterized the problem as a race condition. A race condition occurs when two or more parts of a program that rely on each other get locked in an infinite loop, halting forward progress of the program as a whole. The race condition in this case took place between the auction process and the final calculation of the IPO price.
While most race conditions can be identified by simply testing programs while in development, in some cases they may not become apparent until the software is stressed under heavy usage, said Scott Sellers, CEO of software provider Azul Systems. Azul offers a version of the JVM (Java Virtual Machine) engineered for extreme scalability.
- Facebook launches redesign with a bit of the old, a bit of the new
- Facebook eyes solar-powered drone company
- Facebook coughs up $19B for WhatsApp's younger users
- Facebook buying WhatsApp for $16 billion
- Facebook's birthday present: A look back at your social life
- At 10, Facebook strives not to be your granny's social network
- Facebook sees apps in its future ... lots of apps
- Facebook hijacks Trending feature from rival Twitter
- Facebook to kill off one kind of ad some users hated
- Facebook uses a seasoned Chef to keep servers simmering
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
Something-something “LASER” something-something-something.
The MtGox Bitcoin exchange is bankrupt. Not a huge surprise, but insiders are also alleging chronic incompetence within the company, flowing from the CEO, Mark Karpeles. Supposed hackers have also leaked some PHP code that appears to substantiate those allegations. But could it all be an elaborate ruse to steal customers'
MtGox Co., Ltd. is now aiming for "civil rehabilitation" in a Tokyo District Court (similar to Chapter 11 bankruptcy protection in the U.S.).
In IT Blogwatch, bloggers release the frickin’ ill-tempered, mutated sea bass.
- IT Certification Study Tips
- Register for this Computerworld Insider Study Tip guide and gain access to hundreds of premium content articles, cheat sheets, product reviews and more.
- Changing the Way Government Works: Four Technology Trends that Drive Down Costs and Increase Productivity
- This paper discusses four technology-based approaches to improving processes and increasing
productivity while driving down department and agency costs.
- Accelerating Speed to Market in the Highly Competitive Automotive Industry
- This White Paper discusses how an Enterprise Project Portfolio Management solution optimizes project analysis, management, reporting and risk mitigation processes to accelerate new...
- ERP in the Cloud and the Modern Business
- View IDC's White Paper, to review IDC CloudTrack Survey findings, gain expert insight into the challenges and opportunities the cloud presents, and determine...
- Financial Security: What smaller Institutions can learn from DDoS attacks on big banks
- Since last fall, several waves of distributed denial of service (DDoS) attacks have targeted major players in the U.S. banking industry. JPMorgan Chase,...
- Pay-as-you-Grow Data Protection: IBM Tivoli's Full-featured Data Protection Suite for Small to Medium Businesses
- IBM Tivoli Storage Manager Suite for Unified Recovery gives small and medium businesses the opportunity to start out with only the individual solutions... All Financial IT White Papers
- Meg Whitman presents Unlocking IT with Big Data During this Web Event you will hear Meg Whitman, President and CEO, HP discuss HAVEn - the #1 Big Data platform, as well...
- The New Way to Work Knowledge Vault This Knowledge Vault focuses on how, in today's increasingly virtual world, it's more important than ever to engage deeply with employees, suppliers, partners,...
- Getting Ready for BlackBerry Enterprise Service 10.2 Find out how BlackBerry® Enterprise Service 10 helps organizations address the full spectrum of EMM challenges, while balancing the needs of both the...
- Containerization Options: How to Choose the Best DLP Solution for Your Organization This webcast outlines a framework for making the right choice when it comes to containerization approaches, along with the pros and cons of...
- Mobile Apps and Devices Slash Customer Cycle Time Consolidated Engineering Laboratories' field employees used to collect data on triplicate forms that were sometimes hard to read and difficult to manage. After...
- All Financial IT Webcasts