News

NASDAQ Glitch Hits Mediacom, Gemstar

7/08/2001 8:00 PM Eastern

The National Association of Securities Dealers Automated Quotation system adjusted the closing prices of 72 stocks last week — including Mediacom Communications Corp., Gemstar-TV Guide International Inc. and CSG Systems International Inc. — after a computer glitch at the NASDAQ exchange interrupted trading on June 29.

Mediacom, which lost about $3.85 — 21 percent — of its share price to close at $14 on June 29, requested that NASDAQ look into the trading activity of the stock.

Mediacom chairman Rocco Commisso grew suspicious when the last trade of June 29 came in at $14 after Mediacom stock had been trading in the $17.66 range throughout the day.

"Clearly we thought that was not a legitimate trade," Commisso said of the $14 transaction. "I complained about my price and they ended up changing the price on other stocks."

Commisso would not take sole credit for alerting the exchange to the problem, although he joked that he "must have been the biggest complainer."

NASDAQ said on July 2 that it would adjust Mediacom's June 29 closing stock price to $17.66, an upward revision of $3.66, or most of what was lost on June 29.

Gemstar's June 29 closing was trimmed to $42.60 from $44 and CSG's price was revised upward to $58 from $56.76.

NASDAQ said in a release that the outage — which forced the exchange to extend Friday trading by one hour and suspended after-hours trading — was caused by human error.

"A market interruption of this type is a highly unusual event, and we have taken steps to ensure that it will not happen again," NASDAQ said in a prepared statement. "Friday's market problems were the result of human error. They did not result from a capacity issue and are not reflective of the general reliability of the Nasdaq market or the WorldCom network on which it runs."

Mediacom closed at $18, up 34 cents each, July 2. Gemstar closed at $43.36 (up 76 cents) and CSG closed at $59.01 (up $1.01). In a holiday-shortened session on July 3, Mediacom stock closed at $18.25, up 59 cents each. Gemstar closed at $43.50 (up 14 cents) and CSG closed at $58.95 (down 6 cents).

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