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Breaking News

Trading of Microsoft Stock Halted on Nasdaq

Aired June 28, 2001 - 11:54   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Once again our breaking news story that an appeals court has reversed the ruling that says Microsoft must break up into three separate companies -- the immediate effect of that -- of what that would have on most people: The trading of Microsoft stock has been halted temporarily.

And with more on that and what it means perhaps to your portfolio, let's check in with Sasha Salama -- Sasha, hello.

SASHA SALAMA, CNN CORRESPONDENT: Hi, Daryn. Thanks very much.

This could be a groundbreaking day, not only for Microsoft, but for people who have Microsoft in the their portfolios. It's one of the most widely-held stocks in the U.S. And it's also one of the biggest companies that trades here at the Nasdaq. The stock was halted. As you see, right before the halt, Microsoft had been up about 2 percent.

And it was trading right around $72.50 a share. Because it's one of the biggest stocks that trades here at the Nasdaq and because it's also part of the Dow 30 industrial average, it has a lot of influence -- and particularly at the Nasdaq. When Microsoft makes a big move, it could really influence the entire direction of trading here at the Nasdaq.

The fact that the appeals court reversed the breakup of Microsoft is seen as a victory by most for the software giant. So when the stock does reopen, it could very possibly get a nice bounce to the upside. And for folks who have been looking for the stock to really bounce back from the lows, that will be welcome news. When you look at the stock, over the last 52 weeks it's really mirrored the overall Nasdaq in many ways.

Right now, it's way off of its low. If you go back to December, January, it was cut in half really from where it is now. So Microsoft shares are halted. That is quite common when there is big news out about a company. There are often many orders, trading orders that come in. And to really balance the orders, the stock is halted until the news come out.

And we do expect Microsoft to the reopen at some point later today -- Daryn.

KAGAN: Sasha, you mentioned its influence on the Nasdaq. We should point out that viewers can follow that at the bottom of our screen. It's been a strong day for the markets overall. The Nasdaq is still up 73 points. The Dow is up almost 200 points.

Getting back, though, to the Microsoft stock -- and you mentioned how it's halted -- who makes that call? Who decides to put the halt on a stock like Microsoft on a day like today?

SALAMA: Well, it's a collaborative effort, really, between the company and the Nasdaq market. The Nasdaq has to actually approve the halt. But when a company knows that some big news is going to be breaking, it will alert the Nasdaq. And then the stock is halted.

But you are right, this news comes on a day that has been very bullish for the overall Nasdaq -- almost a delayed reaction, actually, after yesterday, when the Federal Reserve cut rates. Yesterday afternoon it was sort of a lackluster reaction. The Nasdaq finished up only 10 points.

But it really charged ahead -- the bulls, that is -- today -- and Microsoft benefiting from that. Once we get more details about this appeals court ruling, the markets will be sifting through those details. But at least on the surface, it's looking like a big victory for Microsoft and potentially investors in that stock.

KAGAN: All right, Sasha Salama at the Nasdaq, thanks for clarifying that and explaining it to us -- appreciate it much.

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