You are likely well aware of the computer failure that cost Knight Capital Group, Inc. $440 million in just 45 minutes at the opening of the New York Stock Exchange on Wednesday, August 1, 2012. A programming mistake apparently caused KCG’s trading system to send out large numbers of erroneous orders. Some believe that the programming error occurred as a result of KCG’s aggressive push to install a new version of their trading system to coincide with operational changes at the NYSE.
But are you aware of a glitch on the Bloomberg News website?
I was scanning the various reports of the KCG meltdown on the web late Thursday evening, and was reading an August 2-3, 2012 article by Christopher Condon of Bloomberg News with the title “Some ETF Spreads Widen as Knight Capital Seeks to Survive.” But what was this? In a sidebar on the left side of the screen, with the title “Companies Mentioned” it showed that KCB’s share price had dropped 168.99% (that’s right, almost one hundred and sixty-nine percent!). How could that be? The most a stock can lose is 100 percent of its value (which is not true of some options, however). The August 2 closing stock price for KCG was shown as $2.58, which resulted from a drop of $4.36. Well, if the calculation is the change ($4.68) over the price ($2.58), then 169% is correct. But it was obviously the wrong calculation. Incidentally, the percentage changes in share price for Morningstar Inc. and State Street Corp., in the same sidebar, were similarly miscalculated.