On Monday, the New York Stock Exchange (NYSE) addressed and resolved a technical glitch that caused trading disruptions for several major stocks, including a startling report that Berkshire Hathaway shares had dropped by 99.97%.
In their update, NYSE confirmed that all affected stocks have resumed trading and that their systems are now fully operational. According to a senior executive at a major bank, there is no evidence that the glitch was the result of a cyberattack, as communicated to CNN.
An NYSE spokesperson explained that the problem originated from a “technical issue” with industry-wide price bands, which led to trading halts for up to 40 symbols listed on NYSE Group exchanges. These price bands are managed by the Consolidated Tape Association’s (CTA) Security Information Processor (SIP), which publishes real-time trade and quote data for the industry.
CTA reported that the issue may have been linked to a new software release. To rectify this, they reverted to a secondary data center running an older version of the software. The glitch resulted in dozens of stocks being paused, indicating they traded outside the designated limit up-limit down bands, according to NYSE’s website. Among the impacted companies were Chipotle and Berkshire Hathaway, the latter helmed by legendary investor Warren Buffett.
For close to two hours, Berkshire Hathaway’s Class A shares were inaccurately listed at $185.10, a dramatic fall from its previous close of $627,400, reflecting a 99.97% decrease. NYSE has decided to cancel, or “bust,” all erroneous trades of Berkshire that occurred between 9:50 am ET and 9:51 am ET at or below $603,718.30. This decision is final and non-appealable, with potential cancellations of other trades under consideration.
A spokesperson for the Securities and Exchange Commission (SEC) stated that they are actively monitoring the situation and are engaged with market participants. Joe Saluzzi, co-founder of Themis Trading, expressed doubts about the NYSE’s explanation, suggesting it did not adequately explain the bizarre trades observed.
Refinitiv’s trading data showed Berkshire Hathaway trading at $620,700 at 9:44:32 am on Monday before it suddenly crashed to $185.10 without clear justification. “It makes no sense,” Saluzzi remarked.
Despite the technical problems, the broader stock market was largely unaffected and moved lower due to concerns about economic growth. Apart from Berkshire, most impacted stocks and exchange-traded funds (ETFs) were only trading slightly higher or lower. Among the anomalies, Barrick Gold (GOLD), a Canadian gold and copper producer, was temporarily shown trading at 25 cents, a 98.5% drop, but corrected to $17.28 by midday, reflecting a 1.1% increase. NuScale Power (SMR), a developer of modular nuclear reactor technology, was listed at 13 cents, down 98.5%, but later traded at $8.29, down just 5%.
