It's time for Bob Greifeld's reign as chief executive of Nasdaq OMX to come to a close. Granted, his 10 years in the job have by no means been disastrous. But Thursday's three-hour trading halt due to systems glitches is just the latest in a series of more recent high-profile flubs. Greifeld looks to have outlived his usefulness at the exchange.
No market platform or big trading desk is impervious to faulty technology or human error. BATS, the incumbent exchange, screwed up its own IPO last year. Knight Trading lost $440 million on erroneous positions and was forced to sell itself. Even the mighty Goldman Sachs isn't immune, unintentionally placing a series of options bets earlier this week that exchanges have mostly rescinded.
But having to halt trading of some of the biggest stocks on the planet for half a day is the longest outage since a squirrel chewed through power lines in 1994, and way beyond what companies and investors should be expected to tolerate absent any external disaster. Moreover, what failed was one of the core parts of the exchange's operations: the ability to disseminate stock price quotes.
Worse, this is not the first time Nasdaq has screwed up. Just over a year ago it fumbled Facebook's stock-market debut - the biggest the bourse has ever handled - after a piece of new technology failed. Trading in the social network's stock was suspended for around three hours, orders were so messed up it took months to fix, and Nasdaq was eventually fined by the Securities and Exchange Commission.
Add to these two botched big M&A deals. Back in 2006 Greifeld launched an aggressive, unsolicited bid for the London Stock Exchange. Then in 2011 he tried a similarly pushy move to spoil Deutsche Boerse's deal with NYSE Euronext. American antitrust watchdogs shut down Nasdaq's attempt.
Greifeld has diversified Nasdaq's business so that only around 20 per cent of revenue comes from trading stocks - in part with smaller bolt-on acquisitions like bond broker eSpeed. He runs a tight ship, with last year's 20 per cent margin beating NYSE Euronext's 16 per cent. And the stock has outperformed its local rival's, posting a 320 per cent gain since 2004 compared with the NYSE's 215 per cent.
But it's high-profile events that can also make or break careers in the corner office. After a string of such failures, Nasdaq's board should consider closing out its position on Greifeld.
