BATS (BATS) Pulls IPO After Widespread Market Disruption

March 23, 2012 5:12 PM EDT
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In what will go down as one of the most poorly executed IPOs in modern history, global stock exchange BATS Global Markets (OTC: BATS) withdrew its IPO Friday after widespread system failures.

Problems started early for BATS, after the company made the decision to bypass the traditional exchanges NYSE and NASDAQ and bring their stock public on their own exchange.

After pricing the IPO at $16 per share overnight Thursday, shares of BATS opened on the BATS exchange at $15.25 per share at around 10:45AM ET. Within a few trades, however, shares were halted. On other exchanges, the stock was trading as low as $0.038.

At around the time of the halt (10:48AM ET), BATS issued an alert saying it is currently investigating system issues trading in symbols ranging A through BF. Also at around that time, errant trading was being seen in other stocks. At 10:57AMET a bad trade on BATS triggered a trading halt for NASDAQ-traded Apple (Nasdaq: AAPL).

The BATS system declared "self-help" per Rule 611 of Regulation NMS at 11:07AM and routing to BATS was suspended.

By noon, BATS said it had all the trading issues resolved and they canceled all open orders in symbol range A - BFZZZ at 12:40. Trading in these stocks resumed at 12:50ET. However, the company's own stock remained halted.

After first scheduling the resumption in trading in their own stock for 1:20PM ET, the company decided the IPO would not re-open today. Later the company decided to pull the IPO although.

"Although our affected market has reopened, in the wake of today’s technical issues, which affected the trading of certain stocks, including that of BATS, we believe withdrawing the IPO is the appropriate action to take for our Company and our shareholders,” said Joe Ratterman, chairman, president and CEO of BATS Global Markets.

The SEC is investigating today's BATS problems, according to published reports.

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