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By: Ilana Siyance
The New York Stock Exchange experienced a technical glitch on Monday which caused an erroneous reading of share prices of dozens of companies, including Warren Buffett’s Berkshire Hathaway. As reported by the NY Post, the stock price for Berkshire Hathaway
was displayed as down by over 99 percent. Other well-known companies affected in the glitch included Chipotle, Barrick Gold and Nuscale Power, which also saw their stock prices plummet due to the glitch. The stock price of Barrick Gold was shown to be down by more than 98 percent due to the glitch. Trading of shares of the affected company’s stocks were halted due to the unexpected and unwarranted volatility.
For almost two hours on Monday, Berkshire’s Class A stock, which had closed at $627,400 on Friday, was trading for just $185.10, devalued by 99.97%. The stock exchange said on Monday that it was investigating the glitch, and the stocks’ trading was halted in the meantime. The problems were apparently resolved later on the same day by 11:22 a.m. Eastern time, according to NYSE, and trading resumed for all impacted stocks. “All systems are currently operational,” NYSE said. The exchange announced on Monday that it has ruled that all erroneous trades in Berkshire and the other companies affected by the glitch will be null and void. The glitch did not appear to affect the wider market.
Intercontinental Exchange, the parent company of NYSE, said it did not find any indication that the glitch was caused by a cyberattack, a senior executive at a major bank told CNN. A NYSE spokesperson said there was a “technical issue” with industry-wide price bands that “triggered” trading halts on nearly 40 symbols listed on the NYSE exchanges. NYSE explained that price bands are published by the Consolidated Tape Association’s (CTA) Security Information Processor (SIP). CTA, an industry group, is the party responsible for publishing real-time trade and quote data. Per CNN, CTA said it experienced an issue that “may have been related to a new software release.” To fix the problem, it used a secondary data center operating on the software’s older version, the group said.
Trading was halted on those stocks thanks to the Limit Up-Limit Down mechanism built in – which is meant to prevent extreme volatility in the market in individual securities. The mechanism prevents trading from occurring outside of specific price bands that are constantly updated throughout the trading day. Each stock’s price bands are set at a percentage level above and below the average reference price of the stock for the immediately preceding five-minute period. “It’s erroneous trade reports and will get taken from the tape,” said Joe Saluzzi, co-head of equity trading at Themis Trading. “It’s somebody having a glitch whether it’s the exchange or a market maker.”
Trading glitches are rare, but they do occur. In January 2023, a glitch in the NYSE had led to wild price volatility in some 250 stocks, including Verizon, Wells Fargo and Nike— though those price changes were not as extreme as yesterday. Should technical issues on exchanges become a more frequent occurrence, they would impact traders’ confidence.
