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Market Savvy | Savvy Confidential / A briefing for
Investors

Ameritrade Suffers as System Crashes

February 09, 1999|Bloomberg News

Ameritrade Holding Corp. shares fell Monday as the online broker's Internet and touch-tone trading services crashed for about half an hour.

The stock dropped $15.50, or 16%, to $80 in trading of 2.25 million shares, more than double the average volume of the last three months. The shares have fallen 38% the last three sessions as rivals' systems crashed, sparking concern that the industry's 68% growth in trading volume during the last four months outstripped its computers' abilities to handle the transactions.

Omaha-based Ameritrade's outage was the first in at least a month for the No. 6 online brokerage. The company's Web site and a service that lets customers make trades by punching numbers on telephone keypads were down from 5:56 a.m. until 6:24 a.m. PST, said spokeswoman Paula Ebert. The cause was a link to one of Ameritrade's servers, which powers its Web site.

"We've had some heavy volume delays, but this is the first [crash] in awhile," Ebert said. The last reported crashes for Ameritrade were in late November.

E-Trade Group Inc., the No. 3 online broker, crashed four times last week for a total of 4 1/2 hours. The company blamed new software that didn't work with existing programs.

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