June 4th 2024.
The New York Stock Exchange has recently announced that the technical issue that caused a temporary halt in trading for some major stocks has now been resolved. In their latest update, the NYSE has confirmed that the impacted stocks have reopened and all systems are functioning properly.
According to a senior executive from a major bank who is in contact with the parent company of NYSE, Intercontinental Exchange, there is no evidence to suggest that this glitch was a result of a cyberattack. Instead, a spokesperson for the NYSE has stated that the issue was a technical one related to industry-wide price bands. This led to trading halts for about 40 listed symbols on the NYSE Group exchanges.
It is worth noting that these price bands are published by the Consolidated Tape Association's Security Information Processor. This association, responsible for real-time trade and quote data, is an industry group. As per NYSE's website, several stocks, including Chipotle and Berkshire Hathaway, were paused during the day due to trading outside of these so-called limit up-limit down bands. Berkshire Hathaway, which is run by the legendary investor Warren Buffett, saw its Class A shares listed at a shocking price of $US185.10 for almost two hours. This price would represent a loss of 99.97 per cent, while the stock had closed at $US627,400 on Friday.
In light of these unexpected and erroneous trades, the NYSE has taken the decision to cancel all trades for Berkshire Hathaway between 9.50am and 9.51am that were executed at or below $US603,718.30. This ruling is not subject to appeal and the exchange has also indicated that they may cancel other trades as well.
The Securities and Exchange Commission has also been closely monitoring this situation and is in communication with market participants. Joe Saluzzi, a co-founder of Themis Trading and an expert in market structure, has expressed skepticism about the NYSE's explanation for the glitch. He believes that it is difficult to reconcile their statement with the strange trades that occurred during that time.
According to trading data provided by Refinitiv, Berkshire Hathaway was trading at $US620,700 at 9.44.32 yesterday morning. Suddenly, without any apparent reason, the stock crashed to just $US185.10. It is worth noting that this technical issue did not seem to have any impact on the broader stock market, which was mostly down due to concerns about economic growth. Apart from Berkshire, most of the halted stocks and exchanged traded funds were only trading slightly higher or lower.
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