Stock opens at about $42...then trades down to one cent...then closes at about $41

[Cali_Democrat]

And people wonder why ordinary folks are wary of the stock market.

Accenture (ACN) opened at about $42, then traded down to one penny at one point. The stock ultimately closed at $41.09

http://finance.yahoo.com/q?s=ACN

:wtf:

Anyone have an explanation? :shrug:


on edit:

Now it's saying the low was 4 cents instead of one cent. They keep fudging the numbers!

[tabatha]

1. The whole country as become one big fat, but very sad, joke.

[Go2Peace]

24. It's institutional wealth redistribution. Massive money changed hands today

with the institutions and wealthy having special access this was all just another move where the average joe lost money and the right players gained all of the proceeds. Our market has just become a convenient way to extort.

[Nikki Stone1]

30. YES. And this is so much more important than anything

A bunch of stock was artificially devalued and some hedge fund picked it up at bargain basement prices.

[jody]

2. Stock market is a global lottery where those completing transactions make millions and with inside

information aided with computer programs that can profit from minute changes in the market can make billions.

[Go2Peace]

25. Yep, that's the truth. It is all about wealth redistribution. The market is completely manipulated

[Ruby the Liberal]

3. This was the best explanation I have heard yet:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=8286238&mesg_id=8286991

[HughMoran]

17. I agree

[depakid]

4. Computerized trading run amok

and the failure to institute a financial transactions tax to curb rampant speculation and encourage longer term investment.

[Statistical]

11. Bingo. High Frequency Trading is an eocnomic weapon of mass destruction.

The regulations in place are based on a system where orders were executed over minutes often by phone calls.

Flash trading networks can execute hundreds of thousands of orders PER millisecond. They can utterly tank a stock, a market, an economy if allowed to run amuck.

Accenture stock is a classic example a trading program run amuck.

Someone executed a sell order so massive they rode Accenture all the way into the ground. The computer was only doing what it was told to do however the triggers are so complex the humans so wrote it had no idea it would react this way. On the way down it broke through millions of stop loss orders (orders people place ahead of time to limit their losses). They joined the downward spiral like a snowball.

Simply put the selling pressure exceeded every single buyer on the planet. Anyone who had a buy order for accenture today at any price $40, $30, $20, $2.00, $0.37, $0.04 go exectued. The stock hung (no buyers only sellers) for roughly 2 seconds before the market responded and new buyers came in.

These things are like terminators for stock market and they can't be properly controlled. They should be banned and delays (of even a quarter second) should be put into the market.

[depakid]

15. Your stack example illustrated the process very well

It's been how many years now since LTCM, and the market's still vulnerable to these programs.

I agree that banning them, curbing the frequency of trades (or discouraging their use through taxation) is about the only way to prevent disruptions and eventually chaos from ensuing.

I guess the question for reformers is: do we want the markets to be trading on fundamentals- or are we content to see healthy companies and their investors punished by random (or "not so random") events.

[Statistical]

16. I think timelimit curbs and taxation would eliminate it completely.

Even if the tax is tiny say 1/10th of cent per share and the time limit was a token (say execution delay of 1/30th of a second) it would completely make HFT impractical.

[depakid]

20. And as an added benefit, an FTT would bring in a tidy sum to the treasury

which would help to offset what the government paid out to clean up the mess made during the last go around.

[rudy23]

5. I wonder if anyone caught the error ahead of correction, and made a bundle?

According to internet rumor, someone entered "billion" instead of "million", and it sent the stock haywire. I haven't followed up on it, but it sounds like a stretch.

[izquierdista]

14. Note to self

Got to have more open orders working at 10 cents a share.

[still_one]

6. What is even more amazing is they said the system performed as it should

BULL

There was a couple of stocks whose price dropped to 0

you cannot tell me there wasn't a software glitch with nonesense like that

what they have demonstrated is that the system cannot be trusted, and new rules and regulations are desperately required

[gcomeau]

7. It was rather obviously an error.

That kind of thing simply doesn't happen in a legitimate trading environment. You simply do not go from 30+ dollars to one penny in a single transaction on no news. Even companies that make public declarations of bankjruptcy don;t see plunges like that. An investigation is guaranteed to be underway.

I'm beginning to get a little suspicious of a cyber-attack... the combination of nobody in the exchanges saying they're able to find evidence of a bad trade, with the fact that this all just happened to occur almost immediately after 2:30pm when the market curcuit breaker trip levels are relaxed doesn't smell right.

[elfin]

8. Somebody probably made some very serious money today

Not me.

Will any big buys really be investigated and nullified?

Doubt it.

[Dappleganger]

9. A giant clusterfuck because of pushing the wrong key...

if there was a shred of confidence left it's surely gone by now.

[Cessna Invesco Palin]

10. It was a bug. They fixed it.

And nobody is making a fortune off the trades. This is not the first nor will it be the last time this happens.

[izquierdista]

12. Time to go back to the curb

You know, where they sat outside and called the roll of shares and when there was no more noise from the buyers or sellers they went on to the next listing.

[cbdo2007]

13. The official explanation is pretty much the only way this can happen.

"Fat Finger" or typo of some type.

Wish I could have gotten in for a few thousand shares at .01 though!

[slackmaster]

18. Heh, I used to work for Accenture when it was known as Andersen Consulting

They're a bunch of crooks.

[greencharlie]

19. So... does that mean that catching it at a few cents...

and buying $10,000 worth of it could net you enough money to buy a HOUSE?

tell me it's NOT a Ponzi scheme/lotto.

[Cali_Democrat]

21. Well lets see...

IF you bought $10,000 worth of ACN stock at 4 cents, that would mean you bought 250,000 shares. The stock is now trading at about $41. So you would have made $10,250,000

You'd be a millionaire in seconds!

[greencharlie]

23. and what...

precisely, as a human being would you have done to earn that wealth?

[Odin2005]

29. And that, my friend, is why Corporate Capitalism is a scam.

True wealth comes from resources and labor, nothing else.

[dixiegrrrrl]

22. You DO remember taht Accenture is the new name for

our dear departed Arthur Anderson Accounting Firm?

[Odin2005]

26. Wall Street is a giant casino full of stolen wealth.

The elites use this super-fast trading to extract the wealth from the investments of the little guy.

[Rex]

27. Someone saw a crack in the dam.

But there is no crack now, wasn't one.

[taught_me_patience]

28. These trades will be cancelled. n/t

[gravity]

31. There was such a big order that it wiped out all the bids orders

If you try to sell a billion dollars worth of stock all at once, there won't be enough buyers at the moment. The price drove down to near zero for a second then shot back up when more buyers came into the market.