Nasdaq subsequently determined that the unusual trading activity resulted from a typographical error by a subscriber entering orders through an electronic communications network (ECN). The subscriber entered a bid price range of $10 to $95, instead of the intended scaling of $10 to $9.50.
Under Nasdaq’s current authority, transactions effected by the ECN, which were priced above $22, were canceled. The determination of the $22 price level was consistent with Nasdaq’s procedures for adjudicating erroneous trades.
Separately, the matter has been referred to NASD Regulation for investigation.
Axcelis Price Statistics and Three Month History
On February 26, 2001, shares in Axcelis Technologies opened at the price of $10.50, and closed at $11.75, up $1.25. Over the past three months, shares of Axcelis Technologies have traded between $6.28 and $13.44, with an average closing price of $9.66, and a daily average volume of 2,021,982 shares. Nasdaq is adjusting the company’s intra-day high to reflect a price of $22. Axcelis has objected to the intra-day price being set at this level on the grounds that all trades subsequent to the subscriber error were a direct result of the erroneous information caused by the error. Axcelis has requested that the Nasdaq rescind all trades above the closing price of $11.75. The company has registered its concern with Nasdaq that by showing a $22 high, the statistical record will not accurately reflect the company’s true market performance.
Nasdaq Looking at Changes
Under current Nasdaq policy, trading is halted in relation to a news event from a Nasdaq-listed company. This is in line with Nasdaq’s commitment to and long-standing tradition of allowing the market to set the prices for securities. We believe that principle best serves both investors and issuers. Although trading is rarely halted in Nasdaq stocks, the events underlying the trading in Axcelis are an example of the exceptionally rare situation where a potential disclosure relative to the impact of an external event or factor in the stock’s movement warrants a temporary trading halt. In an effort to protect investors further, Nasdaq will be exploring with the SEC, improvements to its practices and procedures concerning its trading halts.
Axcelis Has No Culpability
Axcelis Technologies was in no way responsible for the trading that took place subsequent to the ECN subscriber error. Axcelis Technologies was fully cooperative with Nasdaq throughout the event, providing any necessary information and clarification with regards to the activity. Nasdaq is extremely appreciative of Axcelis Technologies’ continued cooperation in this matter.
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