It takes a highly unusual event for a company to cancel its IPO on the first trading day. During the past thirty years, only the loss of a CEO or accusations of wrongdoing have led to the withdrawal of an IPO. But for BATS Global Markets, all it took was a software bug, which have become all too common in today’s world.
Adding insult to injury to the BATS withdrawal was the fact that it was the company’s own exchange that failed. “This wasn’t just any IPO. It was an IPO of a listing and trading venue,” said Diego Perfumo, Equity Research Desk analyst. The glitch and its consequences crushed investors’ confidence in the company, leading BATS Chairman Joe Ratterman to confess, “We’ve built our reputation on building world-class technology that delivers results. But in this case, we failed.”
The damage caused by one computer glitch impact not only BATS’ reputation but its market share, which dropped several percentage points on Friday, and ultimately, its financial stability. As company founder David Cummings states, “The software bug is probably the easiest thing to correct.” If only repairing the damage to the company’s brand and reputation was just as simple.
Should governance, code compliance, code validation and other forms of governance be a mandate within IT organizations? Let me know your thoughts.