Trade error makes Chinese firm world's most valuable

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Still remember the epic "fat finger" trade by Everbright Securities that caused a two-minute heart arrest in the Chinese stock market back in the summer of 2013?

This time, a similar error earlier this week made a Chinese education firm the world's most valuable company for about eight minutes.

It all started at 9:35 a.m. Eastern Time on Thursday, when bids for stocks in Hailiang Education Group, an education company from east China's Zhejiang Province, were priced at 200,000 US dollars per share on Nasdaq. To put things in perspective, the company's stock opened at just 10.18 US dollars that day.

With 25.7 million shares outstanding, Hailing could claim a market capitalization of 5.14 trillion US dollars, six times that of Apple, making the education service provider the most valuable company in the world – but only for eight minutes.

VCG Photo

After 700 shares were traded at the high price, trading was halted and the transactions later annulled.

"It was a clearly erroneous trade and was canceled," a Nasdaq representative told Washington-based National Public Radio (NPR).

Nadaq considers a sale to be an "outlier transaction" — and subject to cancellation — if a security sells for more than three times its previous price.

Stocks in the firm ended the day at a relatively modest price of 0.34 US dollars.

Hailiang officials did not reply to NPR requests for comment.

Founded in 1995, Hailiang runs three schools with an enrolment of 18,673 students as of June 30, 2016, according to its annual report.

Bloomberg data show that trading in the company’s stock has been halted some 100 times in the past two years, due to Nasdaq’s Limit-up and Limit-down triggers.

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