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The Wall Street Journal: Did Nasdaq drop the ball after Elon Musk’s going-private tweet?

There’s a nagging query on Wall Street after Tesla Inc. Chief Executive Elon Musk’s buyout tweet closing week: Why did Nasdaq let trading in Tesla stocks continue for greater than an hour later on?

Musk tweeted at 12:48 p.m. ET on Tuesday that he had “financing secured” for a buyout of TSLA, +0.86%  t $420 a percentage, a 16% top class to the percentage worth at the time. The remark spark off a frenzy of trading in Tesla stocks, even as buyers had been struggling to discern whether the tweet was official and what exactly it supposed. It wasn’t until 2:08 p.m. that Nasdaq Inc. NDAQ, -0.75%   acted to halt trading in Tesla stocks. In that 80-minute intervening time, buyers who bought and bought the stocks had been probably deprived by the loss of clear information about the company, some buyers stated.

Typically, exchanges halt trading in an organization’s stocks when it tells them it's about to free up “subject matter news,” or data that might sway buyers’ trading selections. An exchange most often assists in keeping trading halted until a disclosure provides some clarity. Other buyers puzzled why the exchange kept the halt in place for greater than an hour and a part, after which why it chose to resume trading at 2:45 p.m.

It’s the newest episode to raise questions in regards to the governance of U.S. markets. “We don’t know what efforts Nasdaq engaged in to get a extra discrete image of what was happening,” stated Harvey Pitt, former chairman of the U.S. Securities and Exchange Commission and chief govt of consulting company Kalorama Partners LLC. “All of that is unheard of, it’s highly problematic and it’s now not in step with cautious and considerate approaches to a difficult matter.”

An expanded version of this file seems on WSJ.com.

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