`Boo-boo' halts sale of local stock

NYSE error set Legg Mason price at 1 cent too high

October 03, 2001|By Bill Atkinson | Bill Atkinson,SUN STAFF

A penny doesn't buy much these days, but it was enough yesterday to halt trading of Legg Mason Inc.'s shares.

The problem began when the New York Stock Exchange miscalculated Legg Mason's opening stock price by 1 cent, sending the firm into a tizzy and prompting speculation that the company might be sold.

The stock opened the day selling at $39.18 - a cent higher than it should have.

Trading in Legg Mason's shares stopped at 1:57 p.m. for nearly 1 hour and 20 minutes while the exchange recalculated the opening price of 89,400 shares.

Trading resumed at 3:13 p.m. with the stock still at $39.18. It closed up 27 cents for the day at $39.45.

The problem was enough to get the rumor mill running at full force. The only thing investors and analysts knew was that trading had been stopped, "news pending."

Phone lines at Legg Mason lighted up with calls from investors and analysts wondering if the company was going to be sold or was involved in some other big deal.

"The analyst community went wild," said F. Barry Bilson, senior vice president of finance at the Baltimore-based asset management and brokerage company. "You do not suspend trading unless there is a real issue ... that has to get out into the public domain."

Legg Mason calmed down anxious employees with an internal e-mail, explaining that the NYSE miscalculated by using a 9-cent dividend payment instead of a correct 10-cent dividend payment.

Bilson said there were no hard feelings.

"It had no affect on our stock price," Bilson said. "This really is just a boo-boo on the exchange's account."

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