On 4th May, 2021, Nasdaq Inc. temporarily suspended showcasing prices for Class A shares of Berkshire over several popular data feeds. Such feeds provide real-time price updates for a number of online brokerages and finance websites.
Introduction
Berkshire Hathaway is a company working in the insurance and investment sectors led by Warren Buffett. The price of its class A shares have risen so high that Nasdaq computers are unable to keep them in the record anymore.On 4th May, 2021, Nasdaq Inc. temporarily suspended showcasing prices for Class A shares of Berkshire over several popular data feeds. Such feeds provide real-time price updates for a number of online brokerages and finance websites.
On that day, Buffet's company closed at a price of $421,420 per share with an upward trend. Although, excellent news for the tycoon and investors, the rise in share price got Nasdaq alerted to the arrival of what the Wall Street Journal calls the 'stock version' of the 'effect 2000'.
Don't know what 'Effect 2000' is?
You need not worry! We got you covered.
The 'Year 2000 Problem', also known as 'the Effect 2000' or 'the Y2K bug' or 'the Millenium bug' refers to events related to the formatting and storage of calendar data for dates in and after the year 2000.
Problems related to incorrect display of dates and the confusion in format of automated dates or scheduling of real-time events were anticipated, and happened as well. This is because many programs at that time showed only the final two digits of four-digit years. So if '00' was displayed, it is not clear which year is being represented 2000 or 1900. Also, two-digit years from '01 through '31 were/could be mistaken for days, and '01–'12 for months in varying date formats.
The Current Trouble
Nasdaq and some other market operators record stock prices in a compact computer format that uses 32 bits, or ones and zeros, which takes up less memory and makes the software more efficient. The biggest number possible is two to the 32nd power minus one (numerical form: 2 ^ 32 -1), or 4,294,967,295. Stock prices are frequently stored using four decimal places, so the highest possible price is $429,496.7295.
Nasdaq is rushing to finish an upgrade later this month that would fix the problem.
In an alert to clients on Monday, 3rd May, 2021, Nasdaq said it is working finish an upgrade of its data feeds by May 17 to allow stock prices greater than $429,496.7295. Until then, however, the exchange said it would temporarily suspend publishing the price of any stock that exceeds 98% of the threshold.
Another exchange operator, IEX Group Inc., said in March that it would stop accepting investors’ orders in Class A shares of Berkshire Hathaway “due to an internal price limitation within the trading system"
On Thursday, 6th May, 2021 the comapny's share reached and exceeded the limit number. Highest price recorded on that was $432,035.50, according to Yahoo Finance.
The New York Stock Exchange, though will not be affected by the rise in the price of Buffet shares or others that may reach it as they have a different algorithm to that of NASDAQ and it can adapt to such adverse prices.
The 90-year-old mogul is currently the sixth-richest person on the planet, with a fortune of $108.4 billion, according to the Forbes Billionaires Index.
Despite the problem for Nasdaq from raising its Class A shares, Buffet is not willing to split the share. That's why he created Class B shares, which trade at a much lower price of $280.
No other stock is close to Warren Buffett’s Berkshire Hathaway in terms of stock price in Class A price category. NVR Inc stock is the closest to Berkshire Hathaway share price. It is trading around $5,100 for Class A, still a long way from catching Berkshire or 'breaking' the Nasdaq.
Nasdaq is rushing to finish an upgrade later this month that would fix the problem.
In an alert to clients on Monday, 3rd May, 2021, Nasdaq said it is working finish an upgrade of its data feeds by May 17 to allow stock prices greater than $429,496.7295. Until then, however, the exchange said it would temporarily suspend publishing the price of any stock that exceeds 98% of the threshold.
Another exchange operator, IEX Group Inc., said in March that it would stop accepting investors’ orders in Class A shares of Berkshire Hathaway “due to an internal price limitation within the trading system"
On Thursday, 6th May, 2021 the comapny's share reached and exceeded the limit number. Highest price recorded on that was $432,035.50, according to Yahoo Finance.
The New York Stock Exchange, though will not be affected by the rise in the price of Buffet shares or others that may reach it as they have a different algorithm to that of NASDAQ and it can adapt to such adverse prices.
Warren Buffet Refuses to Divide His Company Stock
The 90-year-old mogul is currently the sixth-richest person on the planet, with a fortune of $108.4 billion, according to the Forbes Billionaires Index.
Despite the problem for Nasdaq from raising its Class A shares, Buffet is not willing to split the share. That's why he created Class B shares, which trade at a much lower price of $280.
No other stock is close to Warren Buffett’s Berkshire Hathaway in terms of stock price in Class A price category. NVR Inc stock is the closest to Berkshire Hathaway share price. It is trading around $5,100 for Class A, still a long way from catching Berkshire or 'breaking' the Nasdaq.
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Written by: Aastik Pasricha
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