By Medha Singh
(Reuters) – NYSE Arca Equities is looking into likely erroneous trades in the shares of IT solutions provider CDW Corp after they briefly plunged as much as 96% to $7 in premarket trading on Thursday.
The exchange operator, owned by Intercontinental Exchange, said it would bust all trades in the stock between 04:00 a.m. ET and 04:22 a.m. ET, at or below $162.85.
CDW Corp shares quickly recouped most of their losses and were last down 0.7% at $172.09 before the bell. 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 gained 32.5% to $8 in premarket trading, 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.
(Reporting by Medha Singh and Amruta Khandekar in Bengaluru; Additional reporting by Lance Tupper in New York; Editing by Savio D’Souza and Arun Koyyur)
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