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Trading halt in Waddell & Reed shares tied to third party’s incorrect information

Incorrect information about Waddell & Reed led the New York Stock Exchange to halt trading in shares of the Overland Park-based mutual fund company. Trading resumed Friday afternoon.
Incorrect information about Waddell & Reed led the New York Stock Exchange to halt trading in shares of the Overland Park-based mutual fund company. Trading resumed Friday afternoon. Bloomberg

The New York Stock Exchange halted trading in shares of Waddell & Reed Financial for more than two hours Friday after shares had shot up more than 8 percent.

The market was reacting to incorrect information about the mutual fund company’s outflows of investors’ dollars and the exchange stopped trading.

Waddell & Reed corrected the information, which it said had come from a third party, by releasing a statement about its outflows during April and May.

Shares had traded as high as $19.11 before the trading halt. It was their highest trading price since January.

Trading in the company’s stock resumed after more than 2 hours and prices immediately shed much of their sharp morning gains.

Shares fell to $17.73 and then rebounded to a closing price of $18.17, up 51 cents from Thursday’s close at $17.63.

Waddell & Reed’s statement said it had seen $1.4 billion in investor outflows in April and an additional $500 million in May. Its total assets under management conversely benefited by increases in the stock market those months.

Its total assets under management declined to $80.9 billion at the end of May from $81.1 billion at the end of March.

As of Thursday, however, Waddell & Reed had $81.5 billion under management, up 0.5 percent from the March total, the announcement said.

The company has been dealing with a general outflow of investors’ dollars in the face of increasing investor preference for passive investment funds and other issues.

Mark Davis: 816-234-4372, @mdkcstar

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