STOCK EXCHANGE OPERATOR BATS suffered an embarrassing software failure just as the firm launched its own initial public offering (IPO).
BATS operates the third most popular US stock exchange behind the Nasdaq and the New York Stock Exchange, but its plans to grow were dealt a bitter blow on Friday. As BATS announced its IPO, a bug in the software that was handling the symbol range A to BFZZZ rendered open orders on stock symbols within that range inaccessible, leading to BATS requesting the removal of all stock quotes within that range.
For BATS removing the stocks affected was just the first bit of egg on its face. The firm had listed on its own exchange with the symbol of BATS moments before the fault appeared, meaning its own stock was caught up in the bug sending its share price tumbling before the firm pulled the stock quote as part of its mitigation effort.
BATS sent an email to all traders in which it ran through the timeline of the failure. The firm said, "BZX Exchange cancelled all open orders in this symbol range prior to the orderly shutdown and during this period deployed the emergency patch. The shutdown and commencement of trading in this symbol range was orderly and occurred at the communicated timeframes. BATS staff ultimately made a decision not to reopen the BGM stock [under the BATS symbol]. Once the decision was made, the original IPO print was cancelled, individual executions were broken for the day, and notice was submitted to all affected parties."
BATS expects trading to be back to normal today, however it confirmed that its stock will not be trading. The firm is expected to refile its IPO later in the year, although given this highly embarrassing error the share value could be considerably lower the second time around. µ
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