What Caused the NYSE Glitch That Showed Berkshire Hathaway Down 99.97%?

Luckily, the problem has now been fixed, though it left many investors and market observers puzzled.
In this photo illustration, Berkshire Hathaway Inc logo is...
In this photo illustration, Berkshire Hathaway Inc logo is... / SOPA Images/GettyImages

On Monday, the New York Stock Exchange experienced a technical glitch that caused widespread confusion and halted trading for several major stocks, including Berkshire Hathaway, which appeared to plummet by 99.97%.

Fortunately, the issue has since been resolved, but it left many investors and market watchers scratching their heads.

The NYSE quickly addressed the problem, announcing that all impacted stocks had reopened and "all systems are currently operational." According to Intercontinental Exchange (ICE), the parent company of NYSE, there was no indication that the glitch was caused by a cyberattack. Instead, an NYSE spokesperson cited a "technical issue" with industry-wide price bands, which triggered trading halts on up to 40 stocks listed on NYSE Group exchanges.

This Monday, dozens of stocks were paused after trading outside these so-called limit up-limit down bands, affecting companies like Chipotle and Berkshire Hathaway, the latter run by renowned investor Warren Buffett.

For nearly two hours, Berkshire Hathaway's Class A shares were erroneously listed at $185.10, representing a staggering 99.97% drop from its previous close of $627,400. To rectify the situation, NYSE decided to "bust" or cancel all trades for Berkshire that occurred between 9:50 am and 9:51 am ET at or below $603,718.30. This decision is not eligible for appeal, and the exchange indicated that other erroneous trades could also be canceled.

The Securities and Exchange Commission (SEC) is closely monitoring the issue and engaging with market participants. Joe Saluzzi, co-founder of Themis Trading and a market structure expert, expressed skepticism about the NYSE's explanation, noting that it seemed insufficient to account for the bizarre trading activity.

While the NYSE has resolved the technical issue, the incident underscores the importance of robust systems and protocols to handle market data accurately. Investors and market participants will be watching closely to ensure that similar disruptions do not occur in the future.

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