GameStop’s Rise And Technical Glitch in the NYSE
GameStop (GME) stock experienced a significant surge on Monday following a post by the Reddit user “DeepF***ingValue,” believed to be individual investor Keith Gill. Gill, who gained fame for sparking the meme stock rally in 2021, posted a screenshot on Reddit’s Superstonk subreddit late Sunday night, showing that he had built a nearly $175 million position in the video game retailer.
Gill, also known as Roaring Kitty on X and YouTube, displayed holdings of 5 million GameStop shares purchased at an average price of $21.274. As of Friday’s closing price of $23.14, this position was worth $115.7 million. The excitement generated by this revelation saw GameStop shares trading at $38 each in early trading on Monday before a temporary halt was triggered due to volatility.
In addition to his stock holdings, Gill’s account appeared to own 120,000 options contracts that expire on June 21. These contracts give him the right to buy GameStop shares at $20 each, representing a position worth $65.7 million as of Friday’s close.
The renewed interest in GameStop underscores the influence of retail investors and the power of social media in shaping market movements. The temporary halt on GameStop shares due to volatility highlights the significant impact of large, sudden trades on stock prices.
Technical Glitch in the NYSE
Amid the frenzy surrounding GameStop, a technical glitch on the New York Stock Exchange (NYSE) on Monday morning caused further disruptions. The glitch resulted in incorrect stock prices and volatility halts for several stocks, most notably causing a 99.9% drop in the price of Warren Buffett’s Berkshire Hathaway (BRK-A) A-shares.
While Berkshire Hathaway (BRK-B) B-shares, which trade at 1/1,500th the price of the A-shares, were down as much as 1.1% on Monday, they appeared largely unaffected by the error. However, volatility was noticeable in both A-shares and B-shares when trading resumed at around 11:35 a.m. ET.
The NYSE issued a statement explaining that the technical issue stemmed from industry-wide price bands published by the Consolidated Tape Association Securities Information Processor (CTA SIP). These price bands are designed to prevent outsized volatility or extreme movements in individual stocks. The NYSE assured that the impacted stocks had either reopened or were in the process of reopening, and the issue had been resolved.
In addition to Berkshire Hathaway, other stocks such as Chipotle (CMG), Horace Mann Educators (HMN), and Franco-Nevada Corp (FNV), a gold-focused royalty and streaming company, were also temporarily halted for volatility. Chipotle’s halt occurred about 14 minutes after the market opened, despite the stock being down only 1.2%.
Monday’s technical glitch follows closely on the heels of a recent incident where live calculations for the S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) were unavailable for about an hour. This disruption comes just a week after the NYSE began settling stocks in one business day, in compliance with a new rule from the Securities and Exchange Commission, reducing the settlement time from two days to one day.
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