NYSE Software Error Causes 99% Plunge in Berkshire Hathaway Shares

Traders who scooped up Warren Buffett’s Berkshire Hathaway shares at a massive $620,000 discount during glitch will have their deals canceled by the NYSE.

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Investors who purchased shares in Warren Buffett’s Berkshire Hathaway yesterday at a huge discount will see their trades canceled following a technical issue on the stock exchange.

On June 3, a data glitch led the global conglomerate’s stock price to fall to $185 a share, having previously closed at over $620,000. The drop meant a more than 99% discount on the Warren Buffett-led company.

This means a trader who snapped up just $925 worth of the stock at the rock-bottom price would now see their investment worth over $3 million today.

While it hasn’t been confirmed how many people purchased the Class A stock during the technical error—which lasted for around an hour and a half—the New York Stock Exchange (NYSE) has swiftly undone their trades.

In an update posted at 9 p.m. last night, NYSE said it would “bust” all the “erroneous” trades of Berkshire Hathaway stock at or below $603,718.30 a share.

The issue, the exchange added, is related to a problem at the Consolidated Tape Association (CTA), which provides real-time information about quotes and trades on the exchange. The CTA oversees part of the Securities Information Processor (SIP) which consolidates all protected bid/ask quotes and trades into a single data stream.

The CTA said it experienced problems with price banding which “may have been related to a new software release” on SIP. As a result the CTA has reverted to the previous version of the software.

During the blip, the NYSE placed halts on certain trades, and will seek to determine which are erroneous and thus eligible to be canceled. The technical issue has now been resolved, it added, with all tickers trading as normal.

Traders who didn’t hop on a discounted Berkshire Hathaway stock but did buy heavily discounted shares in other brands will also be subject to having their trades struck off—with the ruling not eligible for appeal.

Other tickers that were impacted include American restaurant chain Chipotle (CMG), mining company Barrack Gold Corporation (GOLD) and meme stock darling GameStop (GME).

For Berkshire Hathaway, the good news is that its Class B Stock (BRK.B) was not impacted by the ticker problem, and its Class A stock closed at more than $631,000 a share.

Costly mistakes

The Berkshire Hathaway mega-bargain is one of many hiccups experienced by various international stock exchanges—and is unlikely to be the last.

Just last week, live data from the S&P 500 and the Dow Jones Industrial Average disappeared from traders screens for around an hour. The system then returned to normal but the cause of the outage is being investigated.

While the NYSE issue has been fixed with limited fallout, the same couldn’t be said for a LSE incident that has cost Wall Street giant Citigroup tens of millions.

In May 2022, a London trader bypassed hundreds of warning notifications to create a basket worth $444 billion.

While $255 billion was blocked from trading by Citi’s internal management systems, a basket worth $189 billion was still released to the global markets.

A total of $1.4 billion of equities were sold across various European exchanges before the trader canceled the order. Citi was fined a near-$70 million by the UK’s Financial Conduct Authority for the oversight and related matters.

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