At 5:01pm on Friday June 25, all hell broke loose in the German stock market. It was the final day of a huge 250 million issue of shares in Deutsche Telekom, the country's biggest stock. The deal had been going extremely well. Massive retail demand in Germany and across Europe had assured its success and set a new precedent for pan-European retail share offers. Unusually, the share price had risen sharply during the marketing period - in most secondary offerings the price falls during book-building. But now, in the final half hour of trading before the deal was priced, Deutsche Telekom was in for a big surprise.
The German electronic trading system closed at 5.00pm on that Friday afternoon, showing Deutsche Telekom's share price at €41.68. The final auction - normally a fine-tuning of the price - started at 5:01pm and almost immediately the price started to plummet. For several minutes it was as low as €30 but then recovered. After 25 minutes, the final price of the new offer was set at €39.50. In that short time, institutional investors had dumped 13 million shares.
What had happened? It is still unclear and under investigation.