Adobe Flash Smash

Tyler Durden's picture

Who says flash crashes only take stock prices to zero (or somewhere thereabouts). Adobe just flash smashed, triggering circuit breakers, but to the upside, as this time the HFT algo that goes apeshit lifts every offer. Following the unhalting, the stock has resumed trading somewhat normally again: we will let you know which trades the exchanges decide to cancel momentarily. Of course, we can't decide if it is more surprising that a circuit breaker actually worked for once, or that Waddell & Reed has not yet been implicated in this roughly 20th flash crash following May 6 (we will compile a full list of all HFT-triggered crashes soon). We hope to provide Nanex's explanation of which particular exchange malfunctioned on this one shortly.

The reason for the initial spike is the following speculation by the NYT:

Steven A. Ballmer, Microsoft’s chief executive, recently showed up with a small entourage of deputies at Adobe’s corporate offices in San Francisco to hold a secret meeting with Adobe’s chief executive, Shantanu Narayen.

The meeting, which lasted over an hour, covered a number of topics, but one of the main thrusts of the discussion was Apple and its control of the mobile phone market and how the two companies could partner in the battle against Apple. A possible acquisition of Adobe by Microsoft were among the options.

The New York Times learned about these meetings through employees and consultants to the companies who were involved in the discussions that took place or familiar with their organization, all of whom asked not to be identified as they are unauthorized to speak publicly by Microsoft or Adobe. Those involved in the meeting, from its logistical set up to the discussion that took place between the two companies, were instructed to stay very quiet about the two companies holding council.

Yeah, small entourage appearing at a competitor HQ for a "secret meeting" to discuss an acquisition. Riiiiiight.

Oddly enough, there was no discussion of an LBO of radioshack by the powerful pro-forma MSFTADBE empire. But yes, algos are all about the rumormill.