NYSE to Cancel Berkshire Hathaway Trades After Price Glitch
NYSE to Cancel Berkshire Hathaway Trades After Price Glitch
Investors who purchased Warren Buffett’s Berkshire Hathaway shares at a significant discount will see their trades canceled due to a technical glitch on the stock exchange.
On June 3, a data error caused the global conglomerate’s stock price to plummet to $185 a share, down from its previous close of over $620,000. This represented a discount of more than 99% on the Warren Buffett-led company.
A trader who bought $925 worth of the stock at this erroneous low price would see their investment now valued at over $3 million. However, these trades will be undone by the New York Stock Exchange (NYSE).
Although it remains unclear how many people purchased the Class A stock during the glitch, which lasted for about an hour and a half, the NYSE has acted quickly to cancel these trades.
In an update posted at 9 p.m. last night, the NYSE announced it would cancel all “erroneous” trades of Berkshire Hathaway stock at or below $603,718.30 a share.
The issue stemmed from a problem at the Consolidated Tape Association (CTA), which provides real-time quotes and trade information on the exchange. The CTA, which manages part of the Securities Information Processor (SIP), experienced problems with price banding potentially related to a new software release. The CTA has since reverted to the previous version of the software.
During the incident, the NYSE halted certain trades and is determining which trades are erroneous and eligible for cancellation. The technical issue has now been resolved, with all tickers trading normally.
Traders who purchased heavily discounted shares of other brands will also have their trades canceled, with no option for appeal. Other affected tickers include Chipotle (CMG), Barrick Gold Corporation (GOLD), and GameStop (GME).
Berkshire Hathaway's Class B Stock (BRK.B) was not affected, and its Class A stock closed at more than $631,000 a share. Berkshire Hathaway did not immediately respond to Fortune’s request for comment.
Investors who purchased Warren Buffett’s Berkshire Hathaway shares at a significant discount will see their trades canceled due to a technical glitch on the stock exchange.
On June 3, a data error caused the global conglomerate’s stock price to plummet to $185 a share, down from its previous close of over $620,000. This represented a discount of more than 99% on the Warren Buffett-led company.
A trader who bought $925 worth of the stock at this erroneous low price would see their investment now valued at over $3 million. However, these trades will be undone by the New York Stock Exchange (NYSE).
Although it remains unclear how many people purchased the Class A stock during the glitch, which lasted for about an hour and a half, the NYSE has acted quickly to cancel these trades.
In an update posted at 9 p.m. last night, the NYSE announced it would cancel all “erroneous” trades of Berkshire Hathaway stock at or below $603,718.30 a share.
The issue stemmed from a problem at the Consolidated Tape Association (CTA), which provides real-time quotes and trade information on the exchange. The CTA, which manages part of the Securities Information Processor (SIP), experienced problems with price banding potentially related to a new software release. The CTA has since reverted to the previous version of the software.
During the incident, the NYSE halted certain trades and is determining which trades are erroneous and eligible for cancellation. The technical issue has now been resolved, with all tickers trading normally.
Traders who purchased heavily discounted shares of other brands will also have their trades canceled, with no option for appeal. Other affected tickers include Chipotle (CMG), Barrick Gold Corporation (GOLD), and GameStop (GME).
Berkshire Hathaway's Class B Stock (BRK.B) was not affected, and its Class A stock closed at more than $631,000 a share. Berkshire Hathaway did not immediately respond to Fortune’s request for comment.
The Berkshire Hathaway price error is one of many glitches faced by international stock exchanges. Just last week, live data from the S&P 500 and Dow Jones Industrial Average vanished from traders' screens for about an hour. The system returned to normal, but the cause is still under investigation.
While the NYSE issue had limited fallout, a similar incident at the London Stock Exchange (LSE) in May 2022 cost Citigroup tens of millions. A London trader bypassed multiple warning notifications to create a $444 billion basket, with $189 billion released to global markets. Citigroup was fined nearly $70 million by the UK’s Financial Conduct Authority for the oversight and related issues.
- Lavanya Yadav@Wondernext
While the NYSE issue had limited fallout, a similar incident at the London Stock Exchange (LSE) in May 2022 cost Citigroup tens of millions. A London trader bypassed multiple warning notifications to create a $444 billion basket, with $189 billion released to global markets. Citigroup was fined nearly $70 million by the UK’s Financial Conduct Authority for the oversight and related issues.
- Lavanya Yadav@Wondernext
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