On Monday, the New York Stock Exchange (NYSE) grappled with a significant technical malfunction that led to erroneous stock prices and halted trading for numerous companies, including a dramatic but false 99.97% drop in Berkshire Hathaway’s Class A shares. The glitch, which was tied to the Limit Up-Limit Down (LULD) mechanism designed to prevent extreme price swings, affected up to 60 symbols on the NYSE Group exchanges. The NYSE resolved the issue by transitioning to a backup data center, restoring normal trading operations.In parallel, the stock of GameStop Corporation experienced a significant surge, nearly doubling in price, following a Reddit post by Keith Gill, better known as ‘Roaring Kitty’. Gill’s social media activity has previously sparked substantial movements in what are termed ‘meme stocks,’ which are heavily influenced by retail investors’ sentiment on platforms like Reddit rather than traditional market fundamentals. This latest surge in GameStop’s stock underscores the ongoing impact of social media on financial markets and the potential for rapid shifts in stock valuations based on online hype.The broader stock market showed mixed reactions, with the S&P 500 and Dow Jones experiencing slight declines, while the Nasdaq Composite edged higher. The incident comes as Wall Street adjusts to faster settlement times for US stock trades and follows a week after the S&P 500 index faced a technical issue that left it without live prices for about an hour.
Key points
- The NYSE faced a technical glitch that affected pricing and trading for up to 60 stocks, including a false drop in Berkshire Hathaway’s shares.
- GameStop’s stock surged after a Reddit post by ‘Roaring Kitty’, highlighting the influence of social media on stock prices.
- The broader stock market had a mixed response, with minor declines in the S&P 500 and Dow Jones, while the Nasdaq Composite saw gains.
