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The New York Stock Exchange said Monday’s technical issues were related to mechanisms meant to prevent sudden fluctuations in stock prices.
new york
CNN
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The New York Stock Exchange said Monday it had resolved the technical issues that halted trading in some of its major stocks and caused Berkshire Hathaway Inc.’s shares to fall 99.97%.
In an update, the NYSE said trading in the affected stocks had resumed and “all systems are currently operational.”
Intercontinental Exchange, the parent company of the NYSE, has found no evidence that the outage was caused by a cyberattack, a senior executive at a major bank who has been in contact with ICE told CNN.
Instead, a NYSE spokesman said there was a “technical issue” with an industry-wide price band that “triggered” trading halts in up to 40 stocks listed on NYSE Group exchanges.
The NYSE noted that these price bands are published by the Consolidated Tape Association’s (CTA) Security Information Processor (SIP), an industry group responsible for publishing real-time trading and quote data.
Dozens of stocks were halted early Thursday, indicating they were trading outside so-called upper and lower limits, according to the NYSE website, including Chipotle and Berkshire Hathaway, the holding company run by legendary investor Warren Buffett.
For roughly two hours, Berkshire Hathaway’s Class A shares traded for just $185.10, a loss of 99.97%. Berkshire closed Friday at $627,400.
The New York Stock Exchange announced that it had decided to “set aside,” or cancel, all of Berkshire’s “erroneous” trades below $603,718.30 between 9:50 a.m. and 9:51 a.m. ET. The exchange said the decision cannot be appealed and indicated it may cancel other trades as well.
“We are monitoring this issue and are consulting with market participants,” a Securities and Exchange Commission spokesperson told CNN.
Joe Saluzzi, co-founder of Themis Trading, told CNN that the NYSE’s explanation was hard to square with the strange trading that was on record.
“I don’t believe that explanation. It doesn’t make any sense to me,” said Saluzzi, a market structure expert and author of “Broken Markets.”
Berkshire Hathaway shares were trading at $620,700 as of 9:44:32 a.m. on Monday, according to trading data provided by Refinitiv. Then, without any explanation, the shares crashed to just $185.10.
“All of a sudden, we were getting $185 prints, but there was no price reduction at each level, like you’d expect,” Saluzzi said. “It just doesn’t make sense.”
The technical issues did not appear to affect the overall stock market, which was largely lower on concerns about economic growth.
Outside of Berkshire, most of the stocks and exchange-traded funds that were halted only saw small gains or losses.
But Canadian gold and copper producer Barrick Gold (GOLD) was trading at just 25 cents, down 98.5% on the day, according to Refinitiv. By midday, Barrick was back on track, trading at $17.28, up 1.1% on the day.
NuScale Power (SMR), a maker of modular nuclear reactor technology that just went public, traded for just 13 cents when it listed, down 98.5% that day. After NuScale resumed trading, its shares traded for $8.29, down just 5%.
This story has been updated with additional developments and background information.
