NYSE Glitch Sends Berkshire Hathaway Stock Plummeting 99%

 NYSE Malfunction Sends Berkshire Hathaway Stock Plunging 99%

A software update malfunction on the New York Stock Exchange (NYSE) early Monday triggered an unexpected halt in trading for approximately 40 stocks, with some displaying alarming drops, notably Warren Buffett’s Berkshire Hathaway Inc.

The disruption, the third such incident to affect US markets in the past week, was swiftly addressed after approximately 45 minutes. The Consolidated Tape Association, operating under an NYSE subsidiary, reverted to a backup data center with a different software version to resolve the issue. NYSE has confirmed plans to nullify erroneous trades involving Berkshire Hathaway and is currently assessing the halted trades for potential cancellations.

The abrupt pauses, initiated just before 9:45 a.m. in New York, coincided with the rollout of a software alteration by the CTA. This update governed the display of opening prices on the Securities Information Processor (SIP), responsible for consolidating bid and ask quotes from various exchanges.

During the disruption, several trades for Berkshire Class A shares were executed at $185.10 around 9:50 a.m., drastically lower than the previous day's closing price of $627,400. NYSE has announced the cancellation of any trades executed between 9:50 and 9:51 a.m. at or below $603,718.30. NuScale Power Corp. experienced a similar anomaly, with trades reflecting a significant drop in price.

Despite the disruption, Nasdaq-listed shares remained unaffected, and the broader market experienced minimal impact. However, the incident occurred amidst the transition to one-day settlements from two, known as T+1. Notably, a glitch on Thursday caused the S&P 500 Index to lose live pricing for an hour, while a separate exchange encountered difficulties with the data dissemination feed two days earlier.

Steve Sosnick, chief strategist at Interactive Brokers LLC, described the NYSE glitch as "a little weird" but likely coincidental following the recent S&P 500 incident. Jonathan Corpina, senior managing partner at Meridian Equity Partners, expressed curiosity about the cause of the malfunction.

The Limit Up-Limit Down trading bands typically govern stock pauses for volatility, while the SIP serves as a crucial data feed for regulatory bodies to process bids and ask for quotes and trades across US exchanges.

US equities trading occurs across multiple exchanges, with order data consolidated on feeds distributed globally. NYSE, owned by Intercontinental Exchange Inc., operates various exchanges, including NYSE Arca and NYSE American, while Nasdaq Inc. oversees its exchanges and Tape C, a separate consolidated feed.

These glitches follow the recent transition to one-day settlements and evoke memories of past market confusion, such as the January 2023 incident at the NYSE's backup data center.

Dave Lutz, head of ETFs at JonesTrading, emphasized the confusion caused by these disruptions, highlighting the need for clarity in market operations.