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Monday, June 03, 2024
Berkshire Hathaway's Class A shares ($BRK.A) nosedived by 99.97% due to a rogue algorithmic trade. The stock, which was trading at around $600,000, plummeted to just $175, triggering widespread panic and immediate regulatory intervention.
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In a shocking turn of events, Berkshire Hathaway's Class A shares ($BRK.A) experienced an unprecedented plunge of 99.97% on June 3, 2024. This dramatic drop, caused by a trading error, saw the stock price plummet from its previous high of approximately $600,000 to just $175. The sudden decline was attributed to a rogue algorithmic trade that triggered a cascade of stop-loss orders, wiping out nearly all of the stock's value in mere minutes.
The immediate market reaction was one of disbelief and chaos. Investors scrambled to understand the cause of the crash, while regulatory bodies quickly stepped in to halt trading and investigate the anomaly. The Securities and Exchange Commission (SEC) issued a statement acknowledging the incident and promising a thorough review to prevent such occurrences in the future.
Following the initial panic, Berkshire Hathaway's stock was suspended from trading to prevent further volatility. Once trading resumed, the company's share price rebounded significantly but remained below its pre-crash level. Warren Buffett, CEO of Berkshire Hathaway, addressed the issue in a press conference, emphasizing the robustness of the company's fundamentals and assuring investors of ongoing stability.
The trading error highlighted the vulnerabilities in automated trading systems and the potential for catastrophic consequences when safeguards fail. As the market digests the incident, there will likely be increased scrutiny and regulation of high-frequency trading to prevent future occurrences.
Business
Michael Kelly is the founder and CEO of Candlestick Media and Trendline News. He's a software developer by trade who took a liking to entrepreneurship after graduating college. He founded Trendline News in July of 2023.
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