US exchanges to bust erroneous CDW Corp trades after shares briefly dive 96%

By Medha Singh

(Reuters) – The New York Stock Exchange and the Nasdaq said on Thursday they would cancel erroneous trades in the shares of IT solutions provider CDW (NASDAQ:) Corp, which briefly plunged as much as 96% to $7 in premarket trading.

They would bust all trades in the stock between 04:00 a.m. ET and 04:22 a.m. ET, at or below $162.85, the main U.S. stock exchanges said.

CDW Corp shares quickly recouped most of their losses and were last up 0.2% at $173.50. 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 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 jumped 44.8% to $8.65, 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 (NASDAQ:) 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 (NASDAQ:) in 2021.