(CN) - Potential Facebook investors found nothing to "Like" when they tried to purchase shares of the social networking site's stock on the first day of its initial offering, claiming in a class action that the NASDAQ "grossly mishandled Facebook's IPO."
According to the lawsuit, defendants failed to accurately and promptly process purchase and cancelation orders and delayed the opening by half an hour.
"The massive amount of trading in FB stock overwhelmed Nasdaq's trading system causing a backlog of unfilled orders. Confirmations weren't sent in a timely manner," the complaint states."Investors and brokers could not tell if their orders went through and if they did at what price ... hours passed before some trade orders were processed leaving investors unable to figure out if or when they should sell stock or if they even owned stock.
"Nasdaq was so overwhelmed that it failed to cancel other orders despite timely customer requests to do so."
In the end, investors were being stuck with shares they had bought at inflated prices only to see the value of the stock fall dramatically or were unable to realize the full potential of re-sale thanks to the glitches in Nasdaq's system.
Shares initially began trading at $38 a piece and one point dropping as low as $27 each only to increase in price again this time to $45. Purchasers had no idea at the time what they bought or sold their shares for, according to the lawsuit.
The complaint quotes a Reuters article stating, "behind the scenes the massive order volume was overwhelming Nasdaq's systems." Purchases were held up for hours, and trading dropped off as investors backed away from the stock unsure if they owned shares or not, the story goes on to say.
The Wall Street Journal reported that share purchase orders "never made it through."
The class is represented by Thomas Aman in New York, Brian Robbins and Gregory Del Gaizo of Robbins Umeda LLP in San Diego and William C. Wright in West Plam Beach, Fla.