NYSE Investigating 'Technical Issue' That Showed Berkshire Hathaway Share Price Dropping 99%

The New York Stock Exchange said Monday it was investigating a "technical issue" that was leading to large fluctuations in the prices of certain stocks including Warren Buffett's Berkshire Hathaway. From a report: According to a notice posted on its website, the issue involved "limit up, limit down bands," which are designed to limit volatility. Some 50 stocks were affected, the website indicated, and trades in those companies was halted. NYSE trading data incorrectly showed so-called Class A shares of Berkshire down 99% from its price above $620,000 a share.

Overflow condition?

[PPH]

Time to split the A shares?

Re: Overflow condition?

[klipclop]

Was the technical issue because of the cost of the Shares though? (sounds like it wasn't a) I personally don't think it needs a split... There are a ton of other ways to buy Berkshire. You can just buy the b share or fractional shares via the many retail brokers. :)

Re:

[burtosis]

Was the technical issue because of the cost of the Shares though? (sounds like it wasn't a) I personally don't think it needs a split... There are a ton of other ways to buy Berkshire. You can just buy the b share or fractional shares via the many retail brokers. :)

Exactly, no one really owns stock at a brokerage anyhow they are just IOUs for the stock. If you want to own it you need to directly register the shares, cutting out the middleman limits the number of shenanigans that can be played with ownership but also limits your liquidity compared to a functional brokerage.

Re:

[organgtool]

Given how much fuckery was exposed in the 2008 financial crisis, my trust in brokerages is just barely above my trust in cryptocurrency exchanges. I'm becoming considerably more interested in directly registering shares than trusting them in someone else's custody.

Re:

[burtosis]

I don’t use banks for just this reason. I’ve been using credit unions instead. I have too diverse a portfolio to purchase everything directly and use a brokerage, but I’m also fairly certain that it’s completely possible for the brokerage to go tits up in another financial crisis where their penchant for gambling sinks the ship. The good side to the brokerage is money is only two days away so it lowers my bank balance and gets a higher effective interest rate. If I only held a few

Re:

[account_deleted]

Comment removed based on user account deletion

Re:

[burtosis]

If you want to own it you need to directly register the shares

Why cant you do that through a brokerage?

This is like asking a bank to hold the money in your account physically at a particular bank. No banks do this, it’s only a fraction of all money at any time and they lend out the money to make even more money than any interest you may be getting plus inflation. Thats a main way they make money. Brokerages make money off of stock gambling and will loan out the shares they own even if they are in the name of someone. If you then try to say sell it, the brokerage just gives you the share back to sel

Re:

[account_deleted]

Comment removed based on user account deletion

Re: Overflow condition?

[Vlad_the_Inhaler]

They had that happen in May 2021 [theregister.com] so I'm pretty sure that was not the problem this time. Back then it was a 32-bit problem, the share price is now around 50% higher (hey, I'm impressed - 50% in three years) so unless their workaround was a total kludge . . .
On the other hand, back then it was the Nasdaq which screwed up, this time it was the NYSE. Come on, they had to have read the news back then, really.

Re: Overflow condition?

[omnichad]

The code that failed here was related to limiting volatility. So it's possible that the volatility amount in the stock price itself overflowed (probably a signed integer) and when calculating the floor price, it incorrectly used the overflowed number in the math.

The amount of the sudden drop in price seen in articles - about 627,214.00 is suspiciously close to 64424509.425, which is 1.5x the unsigned 32-bit number limit. Or, the 32-bit unsigned limit + the 32-bit signed limit if counting by pennies.

Re:

[bugs2squash]

soon, after all 640k should be enough for anyone

make that stock go down!

[Joe_Dragon]

make that stock go down!

Re:

[OrangeTide]

buy the dip!

Re:

[Chris Mattern]

'buy the dip!"

Sure! Salsa or nacho cheese?

Re:

[OrangeTide]

I found out the hard way that you can't return salsa after you've opened it.

Re:

[mysidia]

That would have been a hell of a time to buy the dip. Imagine picking up 100 shares of BRK-A at 185.

Could retire tomorrow. Although I'm pretty sure the market maker would find an excuse to break the sale and yoink the shares back.

Re:

[timeOday]

Can you imagine how many automated trades must have triggered when BRK appeared at a 99% discount?

Re:make that stock go down!

[Vlad_the_Inhaler]

For such a trade to go through, someone has to sell at that price. If someone actually does sell at the price - for whatever reason - they deserve all they get. Of course it won't be "someone", it will be a pension fund, or - if we're lucky - a hedge fund.

Re:

[kiviQr]

Orders will be busted. Most people Buy/Sell at Market price.

Re:

[organgtool]

I couldn't find the duration that this stock was available at that ridiculous price, but if some poor bastard put in a sell order for market value right before it happened, they could have had a very stressful morning. This is why I always put my orders in with a limit set to the latest market price I can find. If something goes sideways, I'm sure all of the big guys will have their orders corrected, but I'm far less optimistic about small players like myself gaining restitution.

Re:

[smooth wombat]

The trades will be undone since this was a technical issue. That said, I can't imagine any automated systems having their bound set so low as to trigger at a 99% loss in value.

Blah blah conspiracies

[wgoodman]

Just imagine the number of people who would be hauled in front of Congress had this happened to djt meme stock.

Nothing like tip

[jmccue]

Nothing like TIP (Test in Production). I remember when trades were allow to be decided by algorithms a long time ago, some people warned about things like this.

Twice in one week

[smooth wombat]

Last week the NYSE had an issue where share prices were not updating. Today they have an issue where share prices are not properly being recorded.*

Maybe they should move to Linux servers.

* If Berkshire Hathaway share price loses 99% of its value, we are in trouble.

Re:

[thegarbz]

Maybe they should move to Linux servers.

Why not move to a beowulf cluster of phones? I mean if we're going to propose solutions unrelated to the problem let's go all out.

Re: Twice in one week

[godrik]

maybe a beowulf cluster of blockchains!
Just imagine the possibilities!

So were there actual trades?

[Pinky's Brain]

Did some some volatility inducing algorithm actually manage to snag shares at 600k discount?

Re:

[Fly Swatter]

Luckily the NSYE still has T+1 to unwind the sale. If we ever go to real time settlement things like this will crash the market.

Comment removed

[account_deleted]

Comment removed based on user account deletion

Code changes reportedly bankrupted a business

[Anonymous Coward]

Original source: SEC order https://www.sec.gov/files/liti... [sec.gov]

12. To enable its customers’ participation in the Retail Liquidity Program (“RLP”) at
the New York Stock Exchange,5 which was scheduled to commence on August 1, 2012, Knight
made a number of changes to its systems and software code related to its order handling processes.
These changes included developing and deploying new software code in SMARS. SMARS is an
automated, high speed, algorithmic router that sends orders into the market f

Limiting volatility

[vladoshi]

So if you are rich they even have algorithms preventing you becoming poor now.

Russia? North Korea? China?

[jsepeta]

Top 3 suspects. This is cyber warfare.

Re:

[account_deleted]

Comment removed based on user account deletion