BATS Global Markets, a stock exchange that had just gone public, has taken the highly unusual step of withdrawing its initial public offering following a trading setback in the company's stock and in the shares of some of the companies that trade on its platform.
“Although our affected market has reopened, in the wake of today’s technical issues, which affected the trading of certain stocks, including that of BATS, we believe withdrawing the IPO is the appropriate action to take for our Company and our shareholders,” Joe Ratterman, chairman, president and CEO of BATS, said in a statement Friday.
As BATS noted, its shares weren't the only ones dealing with questionable trades. Investors waiting for the perfect time to bite into Apple (AAPL) may have thought they'd finally gotten it when the stock plunged 9%. But shares were halted after the unusual activity, which reportedly involved the erroneous trade of 100 shares, reminiscent of a "fat finger" mistake.
However, there ultimately appeared to be more than a fat finger at play, as BATS said it needed to investigate system issues surrounding trading in ticker symbols ranging from A through BF.
Later, BATS offered more details on the problems it had encountered.
"This morning at 10:45 a.m. ET, BATS BZX Exchange experienced a systems issue affecting trades in securities in symbol range A through BF," BATS said in a statement. "As a result of this systems issue, three erroneous trades occurred ... in Apple Inc., one of which caused a volatility halt in that stock. The erroneous trades were broken under BATS’ clearly erroneous trade policy. The systems issue was rectified at 12:50 p.m. ET at which time trading in the securities in symbol range A through BF resumed."
BATS had its own trading halted due to unusual price activity. Nasdaq, the electronic stock market that BATS was trading on, said it needed to explore "potentially erroneous transactions" involving BATS shares between 11:14 a.m. and 11:15 a.m. All trades executed during that period were canceled.
Data from FactSet showed the first trades executed in BATS shares at $15.25, on the BATS exchange itself, and at $15.75 on Nasdaq at 11:14 and 18 seconds. In the next two seconds, dozens upon dozens of trades went through showing the stock plunging, eventually registering the price of the stock at less than a penny a share before officials stopped the action.
BATS, which has suffered a decline in trading volume this year and is also the subject of an SEC inquiry, had priced its stock Thursday at $16.