The London Stock Exchange (LSE) experienced a significant system outage on Thursday, October 19, 2023, resulting in trading halts for several shares, predominantly smaller equities. The disruption was widely shared via a video on social media on Friday, October 20. The LSE Group Plc is currently investigating the incident.
On the day of the system incident, major companies like Asos Plc, Deliveroo (OTC:DROOF) Plc, and Metro Bank Holdings Plc were significantly affected. The halt primarily impacted smaller-cap shares while blue-chip shares and securities under FTSE 100, FTSE 250, and International Order Book (IOB) operated as usual despite anticipated market volatility and a 1.2% drop in FTSE 100.
Asos Plc, a leading online fashion retailer, was among the companies affected by the trading halt. According to InvestingPro Tips, Asos has been dealing with a significant debt burden and has been quickly burning through cash. There has been a declining trend in its earnings per share, and analysts anticipate a sales decline in the current year. This information is particularly relevant, given the context of the trading halt, as it provides additional insight into the potential financial impact on the company.
Deliveroo Plc, another company impacted by the halt, holds more cash than debt on its balance sheet, according to InvestingPro Tips. However, the company's revenue growth has been slowing down recently, and it has not been profitable over the last twelve months. These tips, which are part of the many additional insights available on InvestingPro, provide a more comprehensive understanding of the company's financial health.
In their final update on the day of the incident, LSE confirmed that there would be no further continuous trading for the affected securities. They also promised updates on the closing auction status for impacted stocks. As of Friday, only stocks on the FTSE 100 Index, FTSE 250, and international order book are currently available for trading amidst this disruption.
This incident mirrors past outages at the LSE in 2019 and June 2018 due to software faults. The LSE manages various international markets, including the equity market, fixed-income market, exchange-traded funds/products, and foreign exchange markets.
Trading statements and Bloomberg reports indicate that the LSE is actively investigating the issue to prevent future disruptions. This incident serves as a reminder of the susceptibility of electronic trading platforms to technical glitches and the potential impact on market operations.
According to InvestingPro's real-time metrics, the market cap of the LSE stands at 27.33M USD, and the P/E ratio is at 11.47. The revenue for the last twelve months (LTM2023.Q2) is 19.53M USD with revenue growth of 22.87%. The return on assets LTM2023.Q2 is 16.47%, and the one-year price total return is 86.93%. These metrics offer a snapshot of the LSE's financial performance amidst the current disruption.
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