by wmrice

Marion Algier/Ask Marion, Daily Thought Pad: http://dailythoughtpad.blogspot.com/

By Hayley Tsukayama,

Technical glitches and chaotic trading marred the stock debut of Facebook on Friday, disappointing investors and company officials who had planned for a festive first day of trading, people familiar with the matter said.

Many in New York and Silicon Valley had called Facebook’s stock sale on the Nasdaq the initial public offering of the year. The size was enormous at $16 billion, the third largest in U.S. history. And the images of newly minted billionaires Zuckerberg and his senior executive team hugging and high-fiving filled cable television shows screens early in the morning before the markets opened. Crowds gathered around Nasdaq’s glass-enclosed showroom in Times Square to watch the first trade of the stock symbol “FB.”

But for the first two hours of regular trading, nothing happened to the share price. “Unchanged,” read the screens on Nasdaq’s exchange and on cable channels which had prepared special segments. When trading finally began at 11:30 am, applause broke out at Facebook’s headquarters.

The stock shot up.

Then chaos ensued.

Traders couldn’t get basic information such as the stock price or even whether their requests for shares were going through Nasdaq’s systems, industry officials with knowledge of the matter said. The stock gyrated wildly. Some investors ran for the exits, selling off or canceling what they had ordered, said the officials, who spoke on condition of anonymity because they were not authorized to talk about these events.

FB tumbled and hit its offering price of $38.

The shares almost certainly would have gone lower, except Facebook’s banks, which had put the deal together, stepped in to prop up the share price. That may have saved Facebook, the banks and Nasdaq from an embarrassing loss on the first day of trading. The practice is legal, but unusual for such a celebrated stock offering.

Throughout the day, the banks — which included Morgan Stanley, JPMorgan Chase and Goldman Sachs — had to bail out the stock several times, the people familiar with the matter said.

By the close of regular trading, the stock had barely scraped out a gain of 23 cents. To top it off, the Securities and Exchange Commission said it would review the incident with Nasdaq to determine what caused the trading glitches.

Facebook declined to comment on the stock trading. Experts noted that the company was still able to raise a massive amount of money through the stock sale. And analysts said the day’s events were hardly a failure for the Menlo Park, Calif company.

Rather, the letdown was on Wall Street.

Industry officials said that most involved in the deal had expected about a 5 percent to a 10 percent gain. In interviews, they pointed the finger of blame at Nasdaq.

“It was just chaos this morning and that put a bad sentiment on the entire day,” said one official, speaking on condition of anonymity. “It’s certainly egg on [Nasdaq’s] face. This was the offering of the year and you needed to have your systems in order.”

Nasdaq declined repeated requests for comment. The parent company of the exchange, Nasdaq OMX Group, saw its stock drop 4.4 percent.

In remarks before trading began, chief executive Mark Zuckerberg stressed that the stock debut, while a big day for the company, was only the beginning.

“Going public is an important milestone in our history,” Zuckerberg told a crowd of cheering employees outside Facebook’s headquarters. “But here’s the thing: our mission isn’t to be a public company. Our mission is to make the world more open and connected.”

His comments underscored a tension point between the company and its investors.

Zuckerberg, who owns 55.8 percent of the company’s voting shares, has said that user experience — not revenue — should drive the company. With 901 million users, the company has the largest social network in the world and yet it faces questions about whether it knows how to make money.

For weeks, analysts have cautioned that Facebook’s shares were overvalued because it has yet to prove it can leverage the trove of personal data its collected from its users.

Many had looked to the Facebook offering as a bellwether for other social media companies. Its performance in today’s market was accompanied by large losses in the stocks of LinkedIn, Pandora and Zynga.

While it’s clear that social media will gain importance moving forward, said Arvind Bhatia, a managing director at Sterne Agee, it’s hard to understand how these companies will do from a business standpoint.

“It depends a lot on how good their models are, how well they take advantage of the shift that’s going on,” Bhatia said.

Analysts said the company’s decision to release more shares than originally had planned could also explain its tepid stock performance.

“It would have been better if they left it alone and priced out of the range,” said David Menlow, the president of IPO Financial. “I don’t believe Morgan Stanley did the right thing and I don’t believe that Facebook did the right thing.”

(Washington Post Co. Chairman Donald E. Graham is a member of Facebook’s board.)

Related stories:

Analysis: Facebook board must learn to deal with genius CEO

Barry Ritholz- Facebook’s IPO: What does it mean for you?

Why Facebook ads are different

With Facebook shares trading close to their $38 offer price and revelations that retail investors got a larger-than-expected slice of the $18.4 billion IPO, market watchers are questioning whether the social network’s debut was overhyped — not just in the media, but in the investor community.

Getty Images

Buy-side anticipation of a huge Day One price pop was high, and yet as of lunch time on Friday, Facebook shares hadn’t crested $45.

Experienced bankers say that with a new issue of this size, moving the shares beyond the single-digit percentage range can be tough, and that Morgan Stanley

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[MS  Loading...      ()   ], the lead bookrunner on the deal, has done an admirable job at keeping the stock trading in relatively stable condition.

GM

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[GM  Loading...      ()   ], for instance, which was an $18.1 billion IPO, only traded a few percentage points above its new issue price on its first day of trading late in 2010. Prior to the first day of trading, bankers said they didn’t expect a more than 10% upsurge on day one, given the deal’s size.

However, with anecdotal reports that some institutional investors got more shares than they were expecting, and new revelations that, according to two people close to the matter, the retail allocation of Facebook IPO shares was more than 20 percent, marking an all-time high for a new issue, some market participants are wondering whether the investor excitement toward the deal was overplayed earlier this week.

(Small investors are the IPO recipients “of last resort,” said one banker who was not directly involved with the deal but has experience with new issues, because they don’t carry a great deal of pricing power and may not hold the stock long term.)

But accounts of the eleventh-hour pricing process from parties close to the matter differ — in some cases starkly. Bankers canvassed investors about the possibility of pricing Facebook

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[FB  Loading...      ()   ] at $39 per share on Thursday morning, say several investors and others familiar with the matter, and some investors rebuffed the suggestion, according to some of these people, prompting a return to the $38 price that was ultimately selected.

But other people familiar with the matter say that the rebuffs were few to none, and that it was Facebook CFO David Ebersman’s call to price at a more-conservative $38 per share. The CFO felt strongly about not pricing the IPO too aggressively, say these people, wanting to feel good about the decision over the long term and knowing that more stock would likely need to be sold within the next year.

These people say also that there was always a desire to give small investors a healthy slice of the deal. Apple and other tech stocks have large retail ownership classes, one of these people added, and it makes sense for Facebook to be in line with those.

- By CNBC's Kate Kelly and Kayla Tausche
@katekellycnbc and @kaylatausche

© 2012 CNBC.com

Maybe the dumb money wasn’t so dumb this time.

The stock market did turn out to be a voting machine on Facebook on Friday (to quote Warren Buffett and Benjamin Graham), and the vote was thumbs-down on flapdoodle.

Market pros will be debating the lessons to be drawn from the disastrous first-day trading in Facebook’s initial public offering. But one lesson is that when given enough information, investors can find their way through fogbanks of hype.

When a stock offering is as closely followed as Facebook’s, it’s much more likely that the shares will be fully valued than that they’ll harbor hidden treasure.  Facebook went public at $38 a share, and after a day of epically heavy trading, closed at $38.23, for a gain of 0.61%. Not quite the huge pop market mavens were predicting.

The expected pattern is that public investors — “dumb money” in Wall Street regard — react more to hype than to fundamentals. That’s why savvy Wall Street traders take it as a bearish signal when small investors pile into a stock or the stock market.

This time the expected frenzy didn’t materialize. What accounts for the disappointing showing? A few things come to mind. Among the downsides of becoming a public company is that your dirty laundry gets a public airing. In the run-up to the IPO, Facebook’s linens were out on the clothesline for all to see.

There was broad coverage of the company’s slowing growth, and its difficulty in placing advertising on mobile devices, through which more than half its users access the website. It didn’t help that General Motors announced just days before the offering date that it was withdrawing all its paid advertising from Facebook out of doubts that the site is an effective advertising medium.

Wall Street prognosticators dismissed some negative leading indicators for the Facebook IPO, including news that institutional insiders such as Goldman Sachs had increased the number of shares they would sell into the IPO, and that allocations of shares to brokerages to push to their clients were also increased at the last minute. Normally, these are signs that interest is lagging, but many on the street figured that the public excitement would prevail.

Facebook may yet be overpriced. Morgan Stanley and its fellow underwriters of the IPO undoubtedly spent millions of dollars, maybe hundreds of millions, propping up the stock Friday so it wouldn’t fall below the $38 offering price, as that would have been a huge embarrassment. No one knows how long they’d continue to do so.

Additionally, in about a week the shares become eligible for short-selling, which could place more pressure on the price. A few months from now, insiders prohibited from selling their own share will have the green light, and millions more shares will enter the marketplace. The question in coming weeks may no longer be how high Facebook can soar, but how low can it go?

RELATED:

Hiltzik: It's lucky that small investors are shut out of Facebook

Hiltzik: Pitfalls of the Facebook IPO

Facebook's IPO fizzle

Facebook Inc.’s (FB) debut on the Nasdaq Stock Market turned into another setback for American equity exchanges, with the $16 billion initial public offering plagued by delays in trade confirmations, crossed quotes and signs that orders were mishandled.

The pricing of the first transaction took a half hour longer than Nasdaq planned. About 30 minutes later, the second- largest U.S. equities exchange operator reported an issue confirming trades from the opening auction with the brokerages that placed them. Nasdaq later established an appeals process for investors whose instructions weren’t carried out.

Scrutiny of American equity markets intensified in March when Bats Global Markets Inc., the third-largest U.S. stock exchange owner, withdrew its IPO after failing to trade on its own platform. Nasdaq’s mishaps, on a day when the most anticipated IPO of the year eked out a gain of 0.6 percent, disappointed investors hoping to erase the memory of Bats.

“It certainly wasn’t their best day,” Larry Tabb, chief executive officer of research firm Tabb Group LLC in New York, said in a phone interview. “That said, it also wasn’t a complete disaster. Nasdaq really needs to investigate what the challenges are and fix them quickly. There was a lot riding on this IPO and apparently it didn’t go so well.”

The U.S. Securities and Exchange Commission said it will review the trading. Nasdaq spokesman Robert Madden didn’t return calls and e-mails seeking comment. Jonathan Thaw, a spokesman for Menlo Park, California-based Facebook, declined to comment.

Treading Water

Facebook advanced 23 cents to $38.23 after surging as much as 18 percent. It fell as low as the IPO price of $38, which valued the company at $104.2 billion. More than 43 million shares were executed at that level, the second-most changing hands at any price except for $42, the opening auction price, data compiled by Bloomberg show. A total of 583 million Facebook shares traded.

Underwriters purchased shares to keep them from falling below $38, people with knowledge of the matter said. The bankers supported the stock amid Nasdaq’s difficulties delivering trade execution messages, said one of the people, who asked not to be identified because the transactions are private.

Facebook was originally scheduled to open at 11 a.m. At about 11:07 a.m., a Nasdaq official told market participants on a conference call that the exchange was delaying the opening. Aside from assurances that an update was coming, the phone line went silent until just before the first trade at about 11:30, according to two people who were on the call and asked not to be identified because the discussions were private.

Appeals Planned

Buy and sell requests that should have been filled in the opening auction, based on the exchange’s rules, weren’t, while cancellations for other trade requests were ignored, they said. Their employers plan to appeal some of the results they received for orders sent to Nasdaq today.

Nasdaq began experiencing problems with its bid and offer quotes after the opening auction trade. By 11:31 a.m., the exchange’s highest bid, or price at which market participants were willing to purchase shares, was $42.99, and its lowest offer to sell was $42.50, according to data compiled by Bloomberg. The quotes produced a so-called crossed market, where sellers appear to be asking less than buyers are willing to pay.

Other markets continued trading, usually with a difference of a few cents between their best bid and lowest offer. Nasdaq’s quotes were marked as manual and not electronically accessible, which allowed brokers and other exchanges to ignore the venue’s prices. Its offer price later dropped to $38.01 and remained at that level, almost $4 below the highest bid, until 1:49 p.m., according to data compiled by Bloomberg.

‘Don’t Like’

“Clearly investors would hit the ‘don’t like’ button,” Matt McCormick, who helps oversee $6.2 billion at Bahl & Gaynor Inc. in Cincinnati, said in a telephone interview.

The IPO price valued the company at 107 times trailing 12- month earnings, more than all Standard & Poor’s 500 Index stocks except Amazon.com Inc. and Equity Residential. The valuation also made Facebook, co-founded in 2004 by a then-teenage Mark Zuckerberg, the largest company to go public in the U.S.

Nasdaq said in a statement posted to its website at 11:59 a.m. New York time that it was having a problem delivering trade confirmations related to the IPO. “Nasdaq is working to deliver these executions back to customers as soon as possible,” according to the notice. The company said in a message at about 1:57 p.m. that the delayed messages had been sent.

No Confirmations

Customers of London-based Fidessa Group Plc, which helps asset managers track transactions, weren’t receiving confirmation of Facebook trades, according to an e-mailed statement. Michael Cianfrocca, a spokesman for Charles Schwab Corp. in San Francisco, wrote in an e-mail: “There are currently industrywide delays in reporting trade executions. These issues do not appear to be unique to Schwab.”

Uncertainty about whether orders received executions in the opening auction affected some clients of online broker TD Ameritrade Holding Corp. (AMTD), according to Steve Quirk, senior vice president of the trader group at the Omaha, Nebraska-based company. Facebook accounted for 22 percent of today’s equities volume at the firm, he said by e-mail.

“When you have a complex market system that gets overwhelmed, it fails in bizarre ways,” James Angel, a finance professor at Georgetown University in Washington, said in a phone interview. “If you don’t know whether you got filled, you don’t know your position. If you’re buying you might buy more shares and then suddenly you’ve got twice as many shares as you wanted. It makes it hard to do your risk management and hard for brokers to know how much credit to extend to customers.”

Nasdaq Shares

Nasdaq OMX (NDAQ) shares fell 4.4 percent, the most since October, to $21.99. NYSE Euronext gained 0.3 percent to $24.61.

Adding to the initial confusion surrounding the opening trade in Facebook was a halt in a company that generated 11 percent of the company’s $1.06 billion in first-quarter revenue. Zynga Inc. (ZNGA) failed to trade for almost an hour after being paused by a single-stock circuit breaker, designed to curb volatility when a price swings at least 10 percent in five minutes.

The stock was paused at 11:37 a.m. New York time after dropping as much as 14 percent to $7.08. Each circuit breaker normally lasts five minutes. It resumed at 12:29 p.m., only to be paused again when it rebounded from the earlier decline. The second halt lasted more than an hour.

Dani Dudeck, a Zynga spokeswoman, declined to comment.

“For many people, Zynga was a proxy for Facebook,”said Angel, a director of Jersey City, New Jersey-based Direct Edge Holdings LLC. “Nobody knew what was going on. Nasdaq may have had their hands full dealing with the Facebook glitches and may have just let it slide. That’s not a good sign.”

Federick’s of Hollywood

Loncor Resources Inc. (LN) and Frederick’s of Hollywood Group Inc. (FOH), both listed by a market owned by NYSE Euronext, and Nasdaq-listed MER Telemanagement Solutions (MTSL) Ltd. were halted between 12:22 p.m. and 12:24 p.m. New York time.

Facebook’s offering came as U.S. equity markets are mired in the worst slump since October. About $1 trillion has been erased from share values this month after speculation Greece will leave the euro region reversed the biggest first-quarter rally since 1998. The S&P 500 fell a sixth straight session, losing 0.7 percent to 1,295.22.

“It should be Nasdaq’s day to shine and instead it’s more questions and bugs in the system,” said Larry Peruzzi, senior equity trader at Cabrera Capital Markets LLC in Boston.

To contact the reporter on this story: Nina Mehta in New York at nmehta24@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

Two of the possibly plagiarized recipes, said in the Pow Wow Chow cookbook to have been passed down through generations of Oklahoma Native American members of the Cherokee tribe, are described in a New York Times News Service story as originating at Le Pavilion, a fabulously expensive French restaurant in Manhattan. The dishes were said to be particular favorites of the Duke and Duchess of Windsor and Cole Porter.

The two recipes, "Cold Omelets with Crab Meat" and "Crab with Tomato Mayonnaise Dressing," appear in an article titled “Cold Omelets with Crab Meat,” written by Pierre Franey of the New York Times News Service that was published in the August 22, 1979 edition of the Virgin Islands Daily News, a copy of which can be seen here.

Ms. Warren’s 1984 recipe for Crab with Tomato Mayonnaise Dressing  is a word-for-word copy of Mr. Franey’s 1979 recipe.

Mrs. Warren’s 1984 recipe for Cold Omelets with Crab Meat contains all four of the ingredients listed in Mr. Franey’s 1979 recipe in the exact same portion but lists five additional ingredients. More significantly, her instructions are virtually a word for word copy of Mr. Franey’s instructions from this 1979 article. Both instructions specify the use of a “seven inch Teflon pan.” The 1984 Pow Wow Chow recipe reads:

Use a small omelet pan, or, preferably, a seven-inch Teflon pan. Heat about one-half teaspoon butter in the pan. Add about one-third cup of the egg mixture. Let cook until firm and lightly brown on the bottom, stirring quickly with a fork until the omelet starts to set. When set slip a large pancake turner under the omelet starts to set. When set, slip a large pancake turner under the omelet and turn it quickly to the other side. Let cook about five seconds. Remember, you want to produce a flat omelet, not a typical folded omelet. Turn the omelets out flat onto a sheet of was paper. Continue making omelets until all the egg mixture is used.

Ms. Warren’s instructions are word-for-word copies of Mr. Franey’s 1979 instructions for this recipe, with one exception. Ms. Warren says, “Let cook until firm and lightly brown…” and Mr. Franey says “Let cook until firm and lightly browned…” [emphasis added]

Mr. Franey elaborates in this 1979 article on the origins of the recipe:

When I was chef at Le Pavilion it enjoyed a considerable esteem in America, and the owner, Henri Soule, had one particular specialty that he would ask to have prepared for his pet customers. The dish was a great favorite of the Duke and Duchess of Windsor and Cole Porter. It is a delicate and interesting creation, especially good for summer dining. It consists of small omelets, flavored with herbs and bits of tomato, served cold with a crab meat filling…This is not the usual oval-shaped omelet rolled over a filling and served hot. It is a flat omelet that is cooked like a pancake and turned over once on the skillet, then served cold. [emphasis added]

Mr. Franey does not suggest that the Duke and Duchess of Windsor enjoyed Cold Omelets with Crab Meat due to any claim on their behalf of Cherokee ancestry, though it is true that the Duchess was American born.

The third potentially plagiarized recipe, "Herbed Tomatoes," appears to be copied from this 1959 recipe from Better Homes and Garden.

Ms. Warren ‘s campaign has not commented on the suggestion that she may have plagiarized her recipe contributions to the Pow Wow Chow cookbook. Sales of the Pow Wow Chow have heated up on Amazon since this controversy began, vaulting from a lowly 1.2 million ranking book to number 11,289 early this morning. 

Michael Patrick Leahy is a Breitbart News contributor, Editor of Broadside Books’ Voices of the Tea Party e-book series, and author of Covenant of Liberty: The Ideological Origins of the Tea Party Movement.

By JACOB BUNGE, JENNY STRASBURG and RYAN DEZEMBER

Facebook Inc.'s public debut had plenty of buzz but not much pop. The shares opened 11% higher, but struggled to stay above their $38 offering price and ended the day up just 23 cents.

It was a tepid debut for one of the largest and most closely watched initial public offerings. More than 30 brokerages and banks were involved in the offering, which saw a nearly 571 million shares change hands on Thursday—a record for a stock debut.

The Internet company's shares opened Friday around $42 and within the first half hour fell as low as $38. The stock recovered as underwriters stepped in to support the price, according to people familiar with the matter. But in the final hour of trading, the shares lost steam and fell back to the $38 level.

There have been only six other initial public offerings that raised more than $5 billion since 1995 and the average first day performance has been a 13% gain, according to Dealogic. Two of them, Visa Inc. with a 28% gain in 2008 and United Parcel Service Inc. in 1999 with a 36% gain, well outperformed Facebook.

Companies and the bankers who take them public typically like to see a first-day pop in the share price, to make the deal worthwhile for those buying at the so-called inside price and to increase investors' enthusiasm for the stock.

The debut was marred by a 30-minute delay in the opening of the shares, coupled with reports from traders about lack of communication about orders. That threatened to dent the reputation of Nasdaq OMX Group, operator of the Nasdaq Stock Market, which competed aggressively with the New York Stock Exchange for the chance to list the deal.

Nasdaq officials told exchange members in a notice at noon that its staff was "investigating an issue in delivering trade execution messages" from trades made in Facebook's IPO. Around 1 p.m. Nasdaq indicated it would provide a "manual report" to brokers with information on Facebook trades.

Once the stock opened, trading was robust—100 million shares traded in the first few minutes and more than 200 million shares changed hands in the first hour. The record for most shares traded on the day of an IPO had been held by General Motors Co., at 458 million.

But during the delay, and afterwards, traders said they were having trouble changing or canceling orders they had submitted to Nasdaq's queue starting at 7:30 a.m.

Traders said the orders were accepted normally, but the usual process for canceling or altering an order wasn't accepted, suggesting problems with the queue.

"We're still waiting" for trade confirmations, said Mark Turner, co-head of sales trading for electronic brokerage Instinet, about 90 minutes after Facebook's stock opened for trading.

One investor said at 12:20 p.m. he was frustrated after a market order he put in around 11:40 a.m., for 1,000 shares, still hadn't been acknowledged by Nasdaq some 40 minutes later. "It's not reasonable," he said, adding that shorter delays for an order of 10,000 or 20,000 shares would be more understandable.

Traders speculated the glitches could be tempering demand for Facebook shares, because would-be buyers couldn't be sure where they stood with earlier orders.

Representatives for Nasdaq OMX had no immediate comment. Shares of the company were down 2% midafternoon with the market flat and other exchange operators trading higher.

One person familiar with public offerings called Facebook's a success, saying that, the delay aside, the trading indicated the stock was well priced. The person said big one-day pops are far-less common in large offerings where lots of trading can help keep pricing efficient.

Social media stocks are among the day's biggest losers. Online games maker Zynga Inc. shares dropped 13% to $7.17 and have been halted after hitting a single-stock circuit breaker. The stock fell more than 10% in five minutes, prompting the halt. Zynga is closely tied to Facebook, as 11% of the social network's revenue comes from Zynga.

Facebook's offering, as expected, drew in investors large and small.

Michael Mullaney, vice president and chief investment officer for Boston-based Fiduciary Trust, which primarily represents high-net-worth individuals, opted not to put in an order with underwriters before the offering, and instead bought shares on the open market Friday.

"If we did get one it would have been a small piece," said Mr. Mullaney of an allocation. "And then who would we give it to? Which one of our clients gets the shares? I'd rather trade it on the open market with every Tom, Dick and Harry. It makes my life easier."

On Friday at 1 p.m., Mr. Mullaney said in an email that he had received his shares at the price he liked, but considered the IPO "a dud."

Meanwhile Theophilus Hodges, a 36-year-old property manager, stopped into an E*Trade branch in downtown Chicago on Friday morning specifically to open an account to buy Facebook shares, he said.

"If it wasn't for Facebook I wouldn't be here," he said as he left the branch to go to his bank and transfer money into his new account. "I missed out on Groupon when it went public, so I'm not going to miss the boat this time."

Mr. Hodges said he plans to invest $10,000 in Facebook shares—including $4,500 of his own money and $5,500 from his mother.

Mr. Hodges expressed confidence in Mark Zuckerberg as Facebook's CEO and said he isn't worried about Mr. Zuckerberg being young. "To me, he's a genius. You know, he created something for the whole world... Everything is social now. The world is a different place with Facebook," he said.

Facebook and its stockholders are selling about 20% of the company's common stock in the IPO. By way of comparison, Groupon Inc. sold about 6.3% of its stock in its IPO, according to Dealogic, while LinkedIn Corp. sold 9.5%. Facebook's bigger so-called float could mean fewer extreme moves in the stock price.

Facebook's IPO is "unprecedented in terms of the demand" from average investors, said Stephen Kay, a managing director at brokerage Knight Capital who works with retail brokerages.

"I spoke to one of my big online brokers and at 6:05 this morning, when they allowed people to hit the button and make an order, there were hundreds of orders that were waiting," Mr. Kay said.

From trading floors to Times Square, Wall Street pros and regular joes had been preparing for the moment, strategizing for the open or deciding whether—or when—to buy shares.

TD Ameritrade had 54,000 orders for Facebook shares by 11 a.m., with half the clients who requested and qualified getting an allocation, according to Steve Quirk, senior vice president of trading for the firm.

Knight Capital Group, one of the biggest aggregators of U.S. retail share trading, on Friday morning saw an order from an investor willing to buy the stock at a price as high as $4,000, according to managing director Steve Kay. The order was essentially an indication the investor was willing to buy the shares at any price.

—Lynn Cowan, Steve Russolillo, Owen Fletcher, Kristen Grind and Alexandra Scaggs contributed to this article.

Write to Jacob Bunge at jacob.bunge@dowjones.com, Jenny Strasburg at jenny.strasburg@wsj.com and Ryan Dezember at ryan.dezember@dowjones.com