US exchanges to bust erroneous CDW Corp trades after shares briefly dive 96%

The New York Stock Exchange and the Nasdaq said on Thursday they would cancel erroneous trades in the shares of IT solutions provider CDW Corp, which briefly plunged as much as 96% to $7 in premarket trading.

They would bust all trades in the stock between 04:00 a.m. ET and 04:22 a.m. ET, at or below $162.85, the main U.S. stock exchanges said.

CDW Corp shares quickly recouped most of their losses and were last up 0.2% at $173.50. Some traders said the plunge was driven by investors mistaking the company’s ticker for newly listed asset manager CaliberCos.

“You have a policy for the free market. If a stock falls more than 20% and it’s deemed like that’s not on news, it’s erroneous, they can cancel or bust all those trades,” said Dennis Dick, a trader at Triple D Trading.

The S&P 500 component CDW, which is expected to hold its annual shareholder meeting at 11:00 a.m. ET, closed at $173.25 with a market value of $23.35 billion on Wednesday.

Scottsdale, Arizona-based CaliberCos jumped 44.8% to $8.65, a day after it jumped in its Nasdaq debut to notch a market value of $123.7 million.

CDW Corp and CaliberCos did not immediately respond to a Reuters requests for a comment.

Similar cases of share reaction due to mistaken identity have occurred earlier.

U.S. regulators clamped down on trading of China-based company Zoom Technologies Inc’s stock when investors confused it for video conferencing platform Zoom Video Communications during the height of the pandemic in 2020.

Similarly, a lesser known Canadian industrial company Meta Materials Inc soared as Facebook changes its name to Meta Platforms Inc in 2021.

Source : Reuters