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?
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?
For example i believe that the day Enron declared its going under the stock fell from 4.00 to 60 cents before getting halted.
Mike: 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”
I 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!
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?
This is indeed fascinating, and scary.
Check out this blow-by-blow on the Poynter Institute Web site:
http://www.poynter.org/column.asp?id=101&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/2008/09/how-old-news-moved-market-united.html
Rich Gordon
Medill School, Northwestern University
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.
What a scary site. The airline industry is already in trouble with higher fuel prices and now chargeing for items like pillows, blankets, and food.
On 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.
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
The 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.
Sometimes you better not follow the market news arround the clock
i wish i bought in at $3
I’d hate to be one of the poor shmucks who sold at $3…