United Airlines Bankruptcy: Don’t Believe Everything You Read
Hmmmm… This is interesting (and a bit scary)…
Apparently a botched news story sparked a selloff of shares of United Airlines (UAL) yesterday. It seems that, on Sunday afternoon, the South Florida Sun-Sentinel accidentally re-ran a six year old Chicago Tribune article about United filing bankruptcy. Unfortunately, there was no date associated with the story, and Bloomberg picked it up and reported it as new information shortly before 11AM yesterday.
Not surprisingly, this blunder resulted in massive selling, driving shares of UAL down 75% from a bit over $12/share to $3/share. Here’s a screenshot of the stock chart showing the precipitous drop.
The story was pulled, and United is reportedly investigating what happened. As of right now, the stock is trading at just shy of $11/share. It’s kind of scary what an errant click of the mouse can do, isn’t it?
Source: Forbes via The Consumerist
Published on September 9th, 2008 - 11 Comments
Filed under: Miscellany
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I’d hate to be one of the poor shmucks who sold at $3…
Comment by MoneyGrubbingLawyer — Sep 9th 2008 @ 2:29 pmi wish i bought in at $3
Comment by tom — Sep 9th 2008 @ 4:24 pmThe window has been so small from what I see that you should be staying in the online trader all day in order to catch it.
Comment by MultifolDream$ — Sep 9th 2008 @ 7:03 pmSometimes you better not follow the market news arround the clock
Items like this make me wish I were a day trader. Of course the reality of day trading is events like this don’t exactly happen every day. Day trading will sometimes pay off, this is an example of that, but long term investing and not paying attention to the ins and outs of the market is a much better strategy.
-Cheers
Comment by twenties money — Sep 9th 2008 @ 7:10 pmWhat a scary site. The airline industry is already in trouble with higher fuel prices and now chargeing for items like pillows, blankets, and food.
Comment by Chris Holdheide — Sep 9th 2008 @ 8:19 pmOn another note though this will the first time in 30 years that Southwest will be taking a loss and not actually make a profit. You know things are getting bad for the airlines when Southwest can’t even make a profit.
What if posting the story years later wasn’t really an accident? That would be a great version of a reverse pump and dump if you were already shorting the shares and could react quickly enough.
Comment by Hank — Sep 10th 2008 @ 6:25 amThis is indeed fascinating, and scary.
Check out this blow-by-blow on the Poynter Institute Web site:
http://www.poynter.org/column......aid=150236
… and this piece I wrote, which may explain how a 6-year-old news article suddenly got enough traffic on a Florida newspaper’s Web site to make the “most popular” list of business stories there:
http://www.readership.org/blog.....nited.html
Rich Gordon
Comment by Rich Gordon — Sep 10th 2008 @ 11:58 amMedill School, Northwestern University
This just an examle what reporting has become, no checks just put it out there without any research themselves, which could of been done very easily. also an example of the crediblity bloomberg reporters have and the paper, is this the way they report on everything?
Comment by art D — Sep 10th 2008 @ 12:57 pmI notice that the short article above is, itself, undated. There is a date in the URL window of the web site, but except for this comments section I can’t find a date anywhere on this page.
Newsflash: The Japanese have bombed Pearl Harbor!
Comment by Mike — Sep 13th 2008 @ 12:58 amMike: Newsflash. The date is listed in two places. Within the url itself…
/2008/09/09/united-…
and at the end of the article where it says:
“Published on September 9th, 2008″
That kind of a situation definitely makes me not want to be a daytrader. With hindsight you think you would have bought it. But what if UAUA had really declared bankruptcy?
Comment by Dividend Growth Investor — Sep 13th 2008 @ 3:57 pmFor example i believe that the day Enron declared its going under the stock fell from 4.00 to 60 cents before getting halted.