--"Human error" delays IPO for WhiteHorse Finance Inc.,
according to Nasdaq
--Nasdaq says it accidentally halted the IPO
--Delayed offering eventually opened, with shares trading
lower
(Adds details beginning in the eighth paragraph, and adds
closing stock price in fifth paragraph)
By Chris Dieterich and Telis Demos
NEW YORK--This time, don't blame the machines.
"Human error" at the Nasdaq Stock Market led to the postponement
of an IPO from WhiteHorse Finance Inc. (WHF) on Wednesday,
according to the exchange.
Nasdaq OMX Group Inc. (NDAQ) inadvertently halted the IPO rather
than simply push back the timing Wednesday morning, according to
people familiar with events at the exchange. The exchange works
with underwriters, and often pushes listings back by a matter of
minutes as an opening price is settled upon, but in this instance
the IPO process was accidentally stopped, these people said. Shares
in the rescheduled WhiteHorse IPO began trading later Wednesday
afternoon.
A Nasdaq spokesman declined to offer details on the nature of
the error, which was briefly described in a note to traders sent
early Wednesday afternoon.
Shares fell in their belated late-afternoon debut, dropping
$1.10, or 7.3%, to close at $13.90. Shares had been originally
scheduled to begin trading at about 11 a.m. EST.
WhiteHorse, a business-development company that originates and
invests in loans to small, private companies, priced its $100
million offering late Tuesday.
Alastair Merrick, WhiteHorse's chief financial officer,
confirmed the trading problems Wednesday morning but didn't respond
to requests for further comment this afternoon.
The troubled WhiteHorse debut comes after problems with
high-profile listings earlier this year. Electronic exchange
operator BATS Global Markets Inc. in March pulled its offering,
carried out on its own exchange, after a software problem caused
trading to be halted shortly after the debut. A month later, data
company Splunk Inc. (SPLK) had some trades in its newly listed
shares canceled due to a technical glitch on NYSE Euronext's (NYX)
all-electronic Arca exchange.
Those episodes paled beside the fallout from Nasdaq's hugely
anticipated Facebook Inc. (FB) IPO in May, when problems forming
the opening trade in the stock left brokers and their customers
unclear as to how many shares they held. The episode drove an
estimated $500 million in losses for Wall Street firms, angered
individual investors and prompted lawsuits against Nasdaq.
Unlike Wednesday's man-made troubles, those incidents were at
least in part linked to technological issues.
"By itself [the WhiteHorse IPO] isn't a big deal," said Patrick
Healy, head of Issuer Advisory Group, which helps companies choose
an exchange for their listings. "But these mistakes are just
becoming way too frequent, and they're killing investors'
confidence."
Deutsche Bank AG (DB) J.P. Morgan Chase & Co. (JPM),
Citigroup Inc. (C) and Barclays PLC (BARC.LN, BCS) served as the
WhiteHorse IPO's prime underwriters.
--Jacob Bunge contributed to this article.
Write to Chris Dieterich at
christopher.dieterich@dowjones.com
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