Man almost dies from Google error (Honest. would we make this stuff up?)

It was like a Wall Street version of one of those Keystone Cops comedies of the 1930s, but at least one investor wasn't laughing. According to his stockbroker, he almost had a heart attack as a result of what appeared to be an enormous plunge Thursday in after-hours trading in the price of the high-flying shares of Internet search engine Google.

The incident, which some Street pros contend is a blunder of major proportions by Nasdaq, surprisingly managed to escape the eyes of the financial press and was never reported even though the decline — an astonishing drop of nearly $350 a share in a mere 10 minutes — was the greatest ever in the history of the stock market in after-hours trading — and undoubtedly in regular trading, as well.

Here's what happened. On Thursday, trading in Google wrapped up the day at $387.12 a share at the usual closing time of 4 p.m. A minute after the close, Google announced its second-quarter results: better than expected earnings, but decelerating revenue growth from the prior quarter.

At 4:02 p.m., in after-hours trading, Google's shares got creamed, initially tumbling to as low as $364, down more than $23 a share from its close, but then rallying back to $391, for a gain of nearly $14.

At about the $391 price point, an order originated on Instinet-ATS (a Nasdaq company) that triggered trades between 4:10 p.m. and 4:12 p.m. at a price as low as $38 (representing a drop of almost $350 a share from the close). In brief, someone from a Nasdaq member firm punched in an erroneous figure to commence a trade.

That led to a host of subsequent trading at $38, as well as at $37.81, $37.82, $37.99, $38.02, $38.03, and $38.05.

Nasdaq, and perhaps the Securities and Exchange Commission, will almost certainly look deeply into the situation to make certain there was no hanky-panky. But that's little solace to the investor I mentioned earlier. He had bought 200 shares earlier last week at around $380, or about $76,000, only to discover from his broker he was suddenly sitting with a fast and damaging paper loss (at the quoted $38 a share) of about $68,400.

http://www.nysun.com/article/36965?page_no=1