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July 4, 2017

NASDAQ data glitch causes share price chaos for Amazon, Apple & Microsoft

Will procedures for price feed testing be re-evaluated following this incident?

By Tom Ball

A stock market glitch set tech company stock prices at $123.47 and caused shock swings, with Amazon falling 87 percent and Microsoft plummeting with losses of over half of its value. Nasdaq’s own company was impacted by the same issue.

The glitch also meant dramatic increases for others, as the Facebook game maker Zynga experienced a price explosion of over 3000 percent.

It is believed that the glitch affected the market data that runs the predominantly automated markets, and hit after trading had closed.

A statement from Nasdaq outlined an investigation into improper use of test data that had been distributed by third parties.

“It was no error by Nasdaq,” said the exchange operator in a stement obtained by the FT. “Some vendors took test data and put it out as live prices.”

Tech giant Apple was also included in the temporary price movement, seeing its value seeing a 348 percent increase. Other major organisations affected included eBay Inc and Alphabet.

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Despite the dramatic impact on prices, and the high profile organisations involved, a Nasdaq spokesman was able to confirm that the glitch had not impacted actual prices, and that no trades were completed at the incorrect price.

Providers including Bloomberg News, Bloomberg LP, and Google Inc showed the dramatic price movements because the New York Stock Exchange operator had carried out a test of its pricing data feed. Wall Street had closed early in light of the following 4th of July national holiday.

READ MORE: Blackrock bets on robots to win big on stock markets

James Angel, a finance professor at Georgetown University in Washington, told Bloomberg, “I’m surprised it doesn’t happen more often… We want these mistakes to happen when the market is closed on a holiday, rather than when the market is open for business.”

This instance is not the only example of Nasdaq experiencing a pricing issue, however. In 2013 trading had to be stopped abruptly for multiple hours due to a fault with the price feed; this was significantly more disruptive as trading was in session.

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