Kraft trading suspended as Nasdaq error lifts price 30%
The Nasdaq suffered its second high-profile embarrassment in six months when it was forced to cancel trades in Kraft Foods after a trading problem caused the company’s shares to soar nearly 30 per cent.
The error marred the completion of the recently split group’s switch to Nasdaq and evoked memories of the exchange’s botched handling of the Facebook flotation in May.
Kraft shares, which together with Mondelez, the snacks group created in the split, switched their listing from the New York Stock Exchange to Nasdaq, surged 28.9 per cent to $58.54 in the first minute of trading after Irene Rosenfeld, Kraft’s former chief executive, rang the opening bell.
Within an hour, Nasdaq and other stock exchanges conducted a review of the processed trades, deemed them erroneous and cancelled them.
Initial investigations suggested the surge was the result of a faulty trading algorithm. The episode has revived concerns that the speed of transactions, driven by technical advances, leaves the market susceptible to errors. – Copyright The Financial Times Limited 2012