On June 3, 2024, the New York Stock Exchange (NYSE) experienced a significant technical glitch that drastically impacted the display of Berkshire Hathaway’s stock prices. This issue caused Berkshire Hathaway’s Class A shares (BRK.A) to erroneously show a dramatic 99% drop in value, leading to widespread confusion and temporary market disruption.
What Happened?
The technical malfunction led to Berkshire Hathaway’s Class A shares, typically valued at over $600,000, being displayed as low as a few hundred dollars. This caused immediate alarm among traders and investors who witnessed the stock price inexplicably plummet. As a result, trading of Berkshire Hathaway’s stock was temporarily halted as the NYSE worked to diagnose and rectify the issue.
Immediate Impact and Market Reaction
The sudden display of a massive price drop prompted a series of panic trades. Many traders attempted to take advantage of what appeared to be an unprecedented buying opportunity, purchasing shares at what seemed to be a drastically reduced price. This surge in trading activity added to the confusion and complexity of the situation.
NYSE’s Response
The NYSE quickly acknowledged the glitch, identifying it as a technical malfunction that had affected the pricing of several stocks, including Berkshire Hathaway. To mitigate the impact, the NYSE halted trading for affected stocks and began an investigation into the cause of the error. The exchange later announced that all trades executed at or below the incorrect prices would be canceled to maintain fairness and market integrity.
By the end of the day, the NYSE confirmed that the glitch had been resolved and that trading for Berkshire Hathaway and other impacted stocks had returned to normal. The exchange emphasized its commitment to preventing such incidents in the future through improved system checks and safeguards.
Investor Reactions and Market Stabilization
Investors who attempted to buy Berkshire Hathaway shares at the erroneous low prices were disappointed to learn that their trades would be canceled. This decision by the NYSE to “bust” all trades below the malfunctioning price point was aimed at ensuring that no trader could unfairly benefit from the technical glitch.
Following the resolution of the issue, Berkshire Hathaway’s stock price stabilized, reflecting its true market value. As of the latest updates, the stock has returned to its normal trading range, with prices closely aligning with pre-glitch levels.
Broader Implications
This incident highlights the vulnerabilities and challenges of modern electronic trading systems. While technical glitches are relatively rare, their potential to cause significant market disruption underscores the need for robust safeguards and rapid response mechanisms. The NYSE’s handling of the situation, including the prompt investigation and cancellation of erroneous trades, was crucial in maintaining market confidence.
