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On May 18th, Facebook's (NASDAQ: FB) first trading on the NASDAQ stock exchange did not run smoothly. As NASDAQ (NASDAQ: NDAQ) experienced significant trading glitches, shares of Facebook plunged 9% throughout the day. Shares then declined around 11% more the following trading day.

In light of Facebook's trading issues on the NASDAQ, some sources have reported that Facebook is in informal talks about switching its equity offering to the NYSE (NYSE: NYX). Others have reported that this may not be the case. Business media, both online and on television, have given this potential switch significant attention.

If rumors of Facebook's talks with NYSE Euronext are true and were not planted strategically, the proposed switch would likely be more of a symbolic action than a genuine attempt to abate future trading issues.

At this point, Facebook's IPO is in the past. Initial Public Offerings (IPOs) in general are arguably the most challenging trading periods for stock exchanges to coordinate and with record volume on its first day, Facebook's IPO was no exception. Would NASDAQ experience glitches of this magnitude in Facebook's standard post-IPO trading? It seems less likely.

NASDAQ's performance surrounding Facebook's IPO might not be a useful indicator of its future performance as Facebook's exchange. It is also unclear how NYSE would have performed under the same circumstances. Facebook cannot feasibly redo its IPO to see if NYSE would have fared better than NASDAQ.

With Facebook's potentially most critical trading event already passed, a switch to NYSE may not drastically affect future trading of Facebook shares unless problems arise from the switch itself. Also, analysts told Benzinga that they would not expect the potential switch to substantially affect NASDAQ OMX's or NYSE Euronext's bottom lines.

But Facebook might still consider the switch solely for its symbolic value.

Facebook could switch exchanges to hold NASDAQ accountable for its errors and send a message that Facebook is not anybody's fool. Sending this message could help Facebook attract more respect in future business relationships. The switch could also appease any shareholders who were adversely affected by NASDAQ's trading glitches.

Even if Facebook's potential switch to the NYSE would be mostly symbolic, it could still be remembered as an important moment in Facebook's early history as a publicly traded company.

Shares of Facebook were trading close to 32 cents or 1% higher for the day. In addition, shares of NYSE Euronext traded down by around 49 cents or 2% and shares of Nasdaq OMX traded lower by around 20 cents or 1%.

Disclosure: At the time of this writing, I did not own shares of any companies mentioned in this post.

Posted-In: News IPOs Trading Ideas Best of Benzinga


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