Technology failure on the New York Stock Exchange collapses companies’ shares by 99%
4 June 2024 10:28
On 3 June, the New York Stock Exchange (NYSE) experienced a technical problem during a software update that led to a temporary drop in the stock prices of several leading companies, including Warren Buffett’s Berkshire Hathaway. The drop was as much as 99%, according to "Komersant Ukrainian" reports with reference to Bloomberg.
The outage, the third in the past week on US exchanges, was resolved in about 45 minutes when the Consolidated Ticker Update (CTA), whose systems are maintained by a subsidiary of NYSE, returned to the backup data centre with a different version of the software.
Several transactions in Berkshire Class A shares were made at $185.10, while on Friday their price was $627,400. A similar glitch occurred with NuScale Power Corp. where trades were about 99% below the previous price.
The NYSE will cancel the erroneous trades in Berkshire Hathaway shares and see if it can lift the halts in other stocks. The problem likely arose during the deployment of a software update that regulates the display of opening prices in the price update feed.
Despite the minimal impact on the market, these incidents come as the trading infrastructure moves to a one-day settlement of trades instead of a two-day settlement, known as T 1. Last week’s disruptions included an hour-long lack of up-to-date prices for the S&P 500 index and problems with the exchange’s interface, including the consolidated data feed.
Analysts call these incidents a coincidence and note their unusual nature after a long period of uninterrupted operation. They expect the erroneous trades to be cancelled.
