Magazine article American Banker

After-Hours Trades Making It Hard to Tell Which Way Is Up

Magazine article American Banker

After-Hours Trades Making It Hard to Tell Which Way Is Up

Article excerpt

For Robert Strickland, senior vice president and director of investor relations at Wells Fargo & Co., it's normally a good day when shares of the $218 billion-asset banking company are up almost 6%.

But not Thursday. On the NYSE, the stock was actually down 31.25 cents, putting Mr. Strickland in strange position of having to telephone a score of sell-side analysts and inform them that what looked like a rise in stock price was really a mirage.

The discrepancy hinged on which opening price stock watchers were using.

On Wednesday, Wells' stock closed at just above $33. But after-hours trading sent the price down to $31.

So on Thursday, the so-called consolidated price -- a composite of a handful of exchanges' quotes -- showed the stock up $1.8125, working off a base of $31. Meanwhile the NYSE showed a fall of 1%, working off a base of $33.3125.

That left Mr. Strickland to call up sell-siders to explain the blip before any misguided euphoria sent in. "It has the potential for creating great confusion," Mr. Strickland said. "That's never good in any market during any time period."

While such anomalies do not often crop up, stock specialists are seeing it happen increasingly as after-hours trading gains momentum.

"We are noticing more close-to-close discrepancies," said Bruce Wright, senior vice president of Robb Peck McCooey Specialist Corp., Wells Fargo's specialist on the NYSE. "It's just a fact of life."

The Chicago Stock Exchange has traded stocks after-hours for three years, and it extended them last October to 6:30 p. …

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