Keeley Adams
Jun 04, 2024 - 01:05

NYSE malfunction causes Berkshire Hathaway stock to plunge 99% - ExBulletin

NYSE glitch halts trading in 40 stocks, shows 99% drop in Berkshire Hathaway shares. Reversed trades, reviewing stops. Market adjusts to T+1 settlement.

A software update glitch on Monday morning caused the New York Stock Exchange to cease trading in approximately 40 stocks and display unusual trades showing a 99% drop in companies such as Berkshire Hathaway Inc., owned by Warren Buffet. This was the third disruption to hit U.S. markets in the past week, but it was resolved after about 45 minutes when the Consolidated Tape Association switched to a backup data center with a different software version.

The NYSE announced that it would reverse the erroneous trades at Berkshire Hathaway and was investigating whether any other trades needed to be corrected. The glitches began just before 9:45 a.m. in New York as the CTA implemented a software change affecting opening prices displayed on the Securities Information Processor. Trades in Berkshire Class A shares occurred at an incorrect price of $185.10, significantly lower than the actual closing price of $627,400.

Similar problems were experienced by NuScale Power Corp., with trades printing at around 99% below the previous price. While the disruptions did not impact Nasdaq-listed stocks and had minimal overall market impact, they occurred as trading infrastructure adapts to settle trades in one day instead of two, known as T+1. The NYSE had experienced an interface issue with data delivery feed just two days earlier.

Steve Sosnick, chief strategist at Interactive Brokers LLC, noted the unusual string of incidents, emphasizing the reliability of trading systems and the surprise at consecutive issues. Jonathan Corpina, senior managing partner at Meridian Equity Partners, expressed curiosity about the cause of the glitches, highlighting the need for understanding in addition to simply identifying the problem.

The SIP, which consolidates bid and ask prices and transactions from all U.S. exchanges, plays a crucial role in processing stock trades. U.S. stock exchanges operate on multiple platforms, with NYSE handling several exchanges including NYSE Arca and NYSE American. The Consolidated Tape Association combines order data from various exchanges, with Nasdaq operating a separate consolidated feed.

These recent disruptions follow the transition to one-day settlement for U.S. stock trades and a previous incident that left the S&P 500 without live pricing for an hour. The confusion surrounding these glitches is reminiscent of a 2023 episode when an error at the NYSE's backup data center led to market chaos. Despite uncertainty about the cause of these issues, market participants are left puzzled by the repeated disruptions affecting trading operations.