Investors who thought they got the deal of a lifetime on Berkshire Hathaway Class A shares are in for a disappointment.
The New York Stock Exchange and other market operators have decided to unwind trades in Berkshire Class A shares that took place at absurdly cheap prices on Monday morning due to a glitch with a key market data feed.
Trading in Berkshire Class A shares was halted at about 9:50 a.m. ET with the price at $185.10, a precipitous drop of more than 99% from Fridays closing price of $627,400 per share.
Other stocks that displayed drops of around 99% after Mondays opening bell included Barrick Gold, Bank of Montreal and nuclear-reactor developer NuScale Power. Trading in the affected stocks resumed later in the morning, and prices reverted to more normal levels.
NYSE said in a notice to traders that trades in Berkshire Class A shares that took place around 9:50 a.m. ET at prices below $603,718.30 would be unwound. Anomalous trades in the other impacted stocks are still under review.
Earlier, a NYSE spokesperson said that up to 40 of its listed stocks and exchange-traded funds were halted Monday morning because of a technical issue at the main data feed that broadcasts prices for NYSE-listed securities. The data feed, called a securities information processor, or SIP, is operated by an arm of the NYSE. Many brokerages and financial-data providers use data from the SIP to show current stock prices.
"Shortly before noon, the issue was resolved and trading in the impacted stocks resumed," the spokesperson said.
The Consolidated Tape Association, the industry consortium that oversees the SIP, said in a notice posted online that the glitch may have been related to a new software release. After the problems emerged this morning, the SIPs operators restarted the data feed from a backup facility that used the old version of the software, fixing the issue, the association said.
The snafu that sent Berkshire Hathaway and other stocks into a tailspin was related to limit up/limit down halts, according to the CTA and NYSE notices. Ironically, thats the investor-protection mechanism that halts stocks during bursts of extreme volatility. People familiar with the matter said an upgrade to the SIP over the weekend was intended to tweak the handling of such volatility halts.
Mondays glitch comes after a technical issue with index provider S&P Dow Jones Indices last week caused a roughly hour-long pause in updates to the S&P 500 and Dow Jones Industrial Average.
Berkshire Hathaway has two share classes, and its Class A shares are famous for having an unusually high price per share, due to Buffetts refusal to split them. Trading in the lower-priced B shares was unaffected by the data glitch.
If traders were able to get Berkshire's A shares for less than half the price of its B shares, that would be quite the opportunity. One Class B share carries just 1/1,500 of the ownership stake of a Class A share. That's why when A shares closed Friday at $627,400, B shares ended at $414.40.