A technical glitch on the New York Stock Exchange caused incorrect stock prices, including a 99.9% drop in Berkshire Hathaway A shares, and halted trading for several companies.
A technical problem on the New York Stock Exchange causes errors in the price of shares
On Monday morning, a technical problem on the New York Stock Exchange (NYSE) led to incorrect stock prices and trading suspensions for several companies. Among them, Warren Buffett’s Berkshire Hathaway A shares (BRK-A) saw a staggering 99.9% drop.
Impact on Berkshire Hathaway Stock
Berkshire Hathaway’s B shares (BRK-B), which are valued at a fraction of A shares, fell about 1.1% but were largely unaffected by the issue. However, both Shares A and Shares B experienced significant volatility throughout the trading day, with Shares A finally resuming trading around 11:35 a.m. ET.
Explanation of the failure on the New York Stock Exchange
In a statement issued shortly after 11 a.m. ET, the NYSE clarified that a technical issue with the industry-wide price bands published by the CTA SIP led to suspensions in several stocks listed on NYSE Group exchanges.
Role of price bands
Price bands serve as mechanisms designed to prevent extreme fluctuations in a stock’s price. While the issue disrupted trading for a period, the NYSE assured investors that the affected stocks have since reopened or are in the process of reopening, and that the issue has been resolved.
Other affected stocks
Chipotle (CMG) stock briefly halted about 14 minutes after the market opened, despite seeing just a 1.2% drop. Similarly, trading was also temporarily halted for Horace Mann Educators (HMN) and Franco-Nevada Corp (FNV), a company focused on gold royalties.
Recent technical problems of the New York Stock Exchange
This glitch occurred shortly after live calculations for the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) were unavailable for about an hour, highlighting recent technical challenges facing the NYSE.
SEC Rule Changes
In addition to these technical issues, about a week ago, the New York Stock Exchange began settling stock trades on one business day to comply with a new Securities and Exchange Commission rule. This rule change reduced the time between a trade and its settlement from two days to one day.
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