The New York Stock Exchange (NYSE) is currently probing a “technical issue” that led to a dramatic fall in Berkshire Hathaway Inc.’s stock value.
Trading of GameStop $GME and $AMC Entertainment stocks was temporarily stopped due to extreme market volatility, triggering concerns among traditional and decentralized finance market analysts.
Unexpected plunge in Berkshire Hathaway shares
Trading anomalies saw the Class A shares of Warren Buffett’s Berkshire Hathaway briefly listed at $185.10, starkly contrasting the normal trading price of $635,000.
This unexpected drop represents a drastic 99.97% decline from its previous close of $627,400. According to FactSet, this severe fluctuation, which matched lows not seen since 1979, occurred amidst broader market disturbances that affected other high-profile stocks. Despite the occurrence, NYSE spokespeople have ruled out cyber interference, with investigations into these glitches ongoing.
Correlation between gameStop activity and market instabilities
The phenomenon of trading halts correlated with surges in GameStop’s stock value has puzzled analysts. Historically notable, the meme stock’s influence was evident when traders like Keith Gill, known as “Roaring Kitty,” influenced massive buying sprees, leading to intermittent trading suspensions.
On May 14, 2024, GameStop and AMC stocks were halted 38 times due to excessive volatility. Following these events, on June 2, 2024, Robinhood paused overnight trading for $GME, reflecting ongoing concerns about market stability linked to these stocks.
Market resumes normalcy amidst investigation
By late morning on June 3, 2024, the NYSE reported that most affected stocks had resumed trading after rectifying issues with the primary electronic stock price publisher. The exchange highlighted challenges with the limit up, limit down bands which are mechanisms designed to temper market volatility. As the trading floor stabilized, the NYSE continued its investigation to prevent future occurrences and to ensure robust trading mechanisms were in place to handle sudden market movements.
This episode reminds us of the vulnerabilities in market infrastructures and the profound impact social media and trading platforms can have on financial markets. As investigations continue, the trading community remains alert to any further disruptions.