Warren Buffett's Berkshire Hathaway Stock Plummets Due to NYSE Technical Glitch
A technical glitch at the NYSE caused major trading halts and incorrectly showed Berkshire Hathaway's shares down 99%.
On June 3, 2024, a significant technical glitch at the New York Stock Exchange (NYSE) led to a dramatic and incorrect display of stock prices for several listed companies, including the investment giant Berkshire Hathaway, led by billionaire investor Warren Buffett. For a period during the morning trading session, Berkshire Hathaway's A-class shares were erroneously shown to be down nearly 100%, suggesting an almost complete wipeout of its market capitalization from almost $900 billion to below $1 billion. This misrepresentation was attributed to a technical issue with industry-wide price bands published by the Consolidated Tape Association (CTA) SIP, causing trading halts in a number of stocks listed on the NYSE Group exchanges.
The glitch also affected other stocks, including Barrick Gold and Nuscale Power, with dramatic falls displayed before trading was paused. The NYSE and the CTA identified the cause as an issue with limit up and limit down price bands, mechanisms meant to combat market volatility. It was later revealed that the issue might have stemmed from a new software release, prompting a decision to revert back to the prior software program for the following trading session.
Despite the temporary trading halt and the dramatic display of share price drops, the situation was corrected, and trading resumed as normal by 11:35 a.m. ET, with no lasting impact on the wider market or the involved companies' actual market valuations. Berkshire Hathaway's A-class shares, in particular, returned to their previous levels, reflecting a minor loss of only 0.28% on the day, in contrast to the erroneously displayed 99.97% loss.
This incident serves as a reminder of the vulnerabilities within the systems and technologies that underpin modern financial markets. It highlights how technical glitches can momentarily shake investor confidence and impact the perception of market stability, albeit temporarily. The NYSE, CTA, and other regulatory bodies continue to investigate the glitch and review potentially impacted trades to prevent similar occurrences in the future.
Berkshire Hathaway, under Warren Buffett's leadership, has traditionally upheld a reputation for financial strength and stability, with a long-term investment approach that has attracted a large and loyal following. Despite recent performance lagging behind the S&P 500 Index except for a rebound in 2024, Buffett's investment strategies and decisions continue to be closely watched and respected in the financial world.
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