On Monday, the New York Stock Exchange (NYSE) experienced a technical issue that disrupted trading for several majorstocks, including Berkshire Hathaway, which saw its value inexplicably drop by 99.97%. The NYSE has since resolved the issue, and all affected stocks have resumed normal trading.
The parent company of the NYSE, Intercontinental Exchange (ICE), reported no evidence suggesting the glitch was due to a cyberattack. Instead, the NYSE attributed the issue to a malfunction with the industry-wide price bands managed by the Consolidated Tape Association’s (CTA) Security Information Processor (SIP). The CTA is responsible for disseminating real-time trade and quote data.
This technical fault temporarily paused numerous stocks as they traded outside the established limit up-limit down price bands. Among those affected were high-profile companies like Chipotle and Berkshire Hathaway, the conglomerate under the leadership of renowned investor Warren Buffett.
Berkshire Hathaway’s Class A shares erroneously listed at $185.10 for nearly two hours, a stark contrast to their Friday closing price of $627,400. Joe Saluzzi, co-founder of Themis Trading and an expert in market structure, expressed scepticism about the NYSE’s explanation. He noted the abnormal nature of the trades, as the stock’s drastic fall lacked the usual incremental steps typical of such price changes.
Berkshire Hathaway shares were trading at $620,700 at 9:44:32 AM on Monday, according to trading data from Refinitiv. Moments later, the stock plummeted inexplicably to $185.10. Saluzzi expects the NYSE to cancel these erroneous trades.
Despite the significant disruption to individual stocks, such as Berkshire Hathaway, the broader stock market remained largely unaffected by the technical issues. Most other halted stocks and exchange-traded funds (ETFs) experienced only minor fluctuations.
Other notable discrepancies included Barrick Gold (GOLD), a Canadian mining company, which briefly appeared to trade at 25 cents, down 98.5%. By midday, Barrick Gold had returned to its normal trading range at $17.28, up 1.1%. Similarly, NuScale Power (SMR), a company specialising in modular nuclear reactor technology, saw its stock listed at 13 cents before recovering to $8.29, down just 5% for the day.
The NYSE has assured that all systems are currently operational and that the affected stocks have reopened for trading. While the precise cause of the technical glitch remains under scrutiny, the incident highlights the potential vulnerabilities in the systems that underpin modern stock trading. The rapid response and resolution, however, demonstrate the robustness of the contingency measures in place to protect market integrity.
