Wednesday, July 25, 2018, a buoyant trading day had been unfolding broadly across US equity markets. Low volatility was the order of the day with a gradually up trending market rally peaking in late afternoon on news of EU compromise regarding the tariff issue.
Shares of Facebook (FB) had joined the party. FB equity shares were up about 1.5% as the 4 pm close loomed. The steady march peaked for the day at precisely 3:59 pm ET at a share price of $218.54.
Then something happened. In the last minute of trading, a “buzzer beater” flurry of sell orders tracked a giant red gouge across the “one-minute chart” that most day traders use to keep watch over trades. The gouge took the FB share price down to $217.50 in a matter of seconds. While only a .48% drop, it is nonetheless a red flag to any chart watcher.
With extended hours trading beginning at 4:15 pm, the plunge in FB shares intensified as the conference call unfolded, eventually shaving an additional 20% off of the equity value of FB shares.
Most Facebook shareholders woke up to the news. Many retail shareholders are users of the site. They never stood a chance.
But a lucky few “big hand” investors sold at what could possibly be remembered as the all-time Facebook stock high watermark of $218.54.
Did the mysterious “buzzer beater” seller(s) have ESP? Were they institutional sellers or individuals? Could insider information have played a part? Will this occurrence ever be investigated?