mike_barton
Editor

Glitch sends Google stock tumbling

news
Jul 31, 20062 mins

The Nasdaq is looking into an incident that sent Google’s stock plummeting by $350 a share last week, The New York Sun reported Monday.

The report said:

The incident, which some Street pros contend is a blunder of major proportions by Nasdaq, surprisingly managed to escape the eyes of the financial press and was never reported even though the decline — an astonishing drop of nearly $350 a share in a mere 10 minutes — was the greatest ever in the history of the stock market in after-hours trading — and undoubtedly in regular trading, as well.

Here’s what happened. On Thursday, trading in Google wrapped up the day at $387.12 a share at the usual closing time of 4 p.m. A minute after the close, Google announced its second-quarter results: better than expected earnings, but decelerating revenue growth from the prior quarter.

At 4:02 p.m., in after-hours trading, Google’s shares got creamed, initially tumbling to as low as $364, down more than $23 a share from its close, but then rallying back to $391, for a gain of nearly $14.

At about the $391 price point, an order originated on Instinet-ATS (a Nasdaq company) that triggered trades between 4:10 p.m. and 4:12 p.m. at a price as low as $38 (representing a drop of almost $350 a share from the close). In brief, someone from a Nasdaq member firm punched in an erroneous figure to commence a trade.

That led to a host of subsequent trading at $38, as well as at $37.81, $37.82, $37.99, $38.02, $38.03, and $38.05.

mike_barton

Mike Barton started out in online slinging HTML for CNET.com in the late 1990s and began his editorial career at New Media magazine shortly thereafter. In his early days, he was an editor at Ziff-Davis's PC Computing and ZDNet.com before heading Down Under, where he produced and edited the business and technology sections of The Sydney Morning Herald online. After returning to the States in 2006, he has worked for IDG's Infoworld, PCWorld, Computerworld, and CSO Online. He currently edits and produces WIRED.com's Innovation Insights, and is a contributing editor at ITworld.

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