Jim Cramer Goes Off On Nasdaq CEO
Jim Cramer is best known for his role as host of Mad Money on CNBC. Or perhaps you know him better from the related Internet meme, “Mad Karma with Jim Cramer.” He’s passionate, he’s outspoken, and he’s very informed. In short, he has a big personality, and he’s not afraid to show it.
So when NASDAQ trading came to a complete halt Thursday, you can be sure Cramer had something to say about it.
If you weren’t on Wall Street yesterday, you may have missed it. A computer glitch at 12:14 P.M. forced NASDAQ to halt all trading of shares of the 3,700 companies listed on its exchange. Trading restarted after nearly three hours and wasn’t back into full swing until 3:30 P.M., just 30 minutes before the market’s close.
What worsened the situation was NASDAQ’s lack of communication. Traders and investors received no explanation regarding the blackout, raising widespread questions and confusion. In the meantime, they couldn’t trade any stocks of companies listed with NASDAQ, even if the companies were listed on other markets as well.
It wasn’t until late afternoon that the company issued a statement saying that a computer problem prevented price quotes from being shared. The statement said it fixed the error within 30 minutes, but kept the market closed for several more hours to “ensure an orderly re-opening of trading.”
As for the lack of information provided to media and investors, NASDAQ Chief Executive Officer Robert Greifeld said it was a matter of priorities. “It’s not our job nor will it be to go on the press, to the press and the public while we focus on the issue,” he said of the incident. In other words, the folks at NASDAQ aren’t very good at multitasking. They can either fix the problem or explain the problem, but not both.
The lack of information combined with the timing of the glitch raises suspicions for some. August tends to be a slow trading month, meaning there’s less strain on the exchange’s systems and it’s less likely that something could go wrong.
More specifically, the shutdown occurred within minutes of Apple’s shares dipping below the threshold of $500 each.
I’m just guessing, but it seems bizarre those things would happen at the same time and not be linked,” said Josh Brown, a financial advisor and regular market commentator.
While there was no mention of potential wrongdoing, some say a formal investigation could follow. Brown commented, “It’s very possible there’s no wrongdoing here… But this is what the regulators are there to do, to determine whether or not we have a chronic problem. And we may not. It may turn out to be something fairly innocuous that could be fixed and never happen again. But I would be shocked if somebody didn’t at least put in an inquiry.”
Let’s get back to Jim Cramer. He’s less peeved about the actual outage than he is about how NASDAQ and CEO Robert Greifeld decided to handle it. Like many, Cramer wanted a better and timelier explanation, or, for that matter, any explanation at all. And Cramer took to any medium he could to voice his concerns.
He spent 40 minutes on Twitter complaining that Greifeld felt no need to communicate with the press. Here’s one of the many comments he had:
How can Greifeld say they halted things to help the retail investor but then didn’t communicate to the press. WRONG WRONG WRONG!
— Jim Cramer (@jimcramer) August 23, 2013
That’s not all. Appearing on CNBC’s Squawk Box this morning he said, “I think it’s only fair that people have more information. I’d like to know under what circumstances is it absolutely not right to communicate with the public if you think you’re protecting retail [investors] which is what Bob [Greifeld] said.”
Watch Cramer’s full comments below:
It’s somebody’s job to say what’s happening: Cramer from CNBC.
Cramer is far from the only person calling for better communication. “The worst part of all of this is the lack of disclosure, the lack of transparency,” according to Arthur Levitt, the former chairman of the Securities and Exchange Commission. “This is inexcusable.”
Amazingly enough, there are some experts who are just fine with Greifeld’s response. Economist and professor Michael Driscoll doesn’t think the outage was a big deal. “It was three hours. What’s the difference?” he said.