Recently, the IPO for BATS was a spectacular failure. Reviewing, BATS is the third largest stock exchange in the USA. They listed their IPO on their own exchange. Their software couldn’t handle the volume. BATS had to rescind their IPO, a major embarrassment.
NASDAQ had the exact same problem with the Facebook IPO. Their software couldn’t handle the volume.
Even one day later, some customers still don’t know if they managed to buy or sell their shares! As a retail customer, you should STAY AWAY FROM IPOs. Even better, stick to gold and silver, taking physical delivery.
If only NASDAQ or BATS had hired me, they might have avoided their disaster!
Superficially, you would say “This software handles billions of dollars a day in volume! It must be awesome!” That would be wrong. Large financial institutions have the worst software out there.
Why would a financial institution need good software, when they can get the government to give them a bailout? Why would large stock exchanges need good software? Regulation protects them from competition. Inflation forces retail investors to use the stock market instead of leaving their money in a checking account.
Those financial institutions are a real software sweatshop environment. They have 100+ programmers and multiple layers of management.
Even though BATS and NASDAQ have lousy software, no single employee is responsible for the disaster! Some low-ranking employee may have been scapegoated. The management structure at large financial institutions is carefully structured so that nobody is ever responsible for anything.
A fool would think “100+ mediocre programmers will always get the job done!” Actually, they will always *SEVERELY* underperform a team of 5-10 people who really know what they’re doing. A large group of mediocre programmers guarantees something that sort of mostly works, but isn’t really reliable.
NASDAQ’s software couldn’t handle the Facebook IPO volume. Large financial institutions don’t need good software. It’s easier to get a bailout and favorable regulations, than to invest in good software. The stock exchanges are indirect beneficiaries of the huge State subsidy of the financial industry.