finance fun fact

Finance fun fact. On Thursday, December 8th, 2005, a trader at the Japanese investment bank Mizuho went to sell one share of a company called J-COM for 610,000 yen, which is about $5,000. But by mistake, he accidentally switched the numbers, so he ended up selling 610,000 shares for just one yen each. One yen is literally less than 1 cent. To make matters even worse, it's not like Mizuho actually had 610,000 shares to sell, and in fact, 610,000 shares is 42 times the total number of shares outstanding. Within 85 seconds, this trader realized what he did and tried to cancel the order. But when he phoned up the Tokyo Stock Exchange, they couldn't cancel the order because it turns out the Tokyo Stock Exchange's software had a glitch and was unable to fulfill order cancellation requests if there were buy orders coming in at the same time. And because the price was just one yen per share, there were lots of buy orders coming in. Eventually, Mizuho's clearly erroneous order was canceled, but the firm was still left with a massive short position, albeit inadvertently acquired. So they had to buy back all the shares that they sold for one yen each at whatever the prevailing market price was. So all in all, Mizuho ended up losing $200 to $300 million dollars on just this one mistake. On the other side of the trade, people like Morgan Stanley did really well. Morgan Stanley ended up with 31.5% of the stock by the end of the trading day. Hope you enjoyed this.