UPDATE: Google Placed Wrong Date On UAL Story, Stock Yo-Yo Ensues
Earlier today, there was a run on shares of United Airlines’ parent company, UAL, following news that the company was filing for bankruptcy. Unfortunately, that news was six years old. Somehow it was republished over the weekend by a Tribune news company without the original dateline, and by the time trading was halted at 12:30pm today, the stock had dropped from $12.30 to $3. The newspapers are still trying to figure out what happened.
According to news aggregation site SmartBrief.com, the South Florida Sun-Sentinel, a Tribune paper, was the first to run the old story about United. It was posted to its Web site at roughly 1 p.m. Sunday.
Sun-Sentinel Online Editor Joe Schwerdt pulled the story off his site shortly before noon this morning, in response to a call Tribune made to Sun-Sentinel editor Earl Maucker.
“I literally just got word a couple minutes ago that there was problem,” says Schwerdt. He says he did not know how the old story was posted as new and was unsure if any other Tribune papers ran it. He declined to discuss details about how his paper publishes stories on weekends.
As of the publish date of this post, shares were back up to $10.92, noticeably lower than where they were trading before the news mix-up. Oops.
“How A Botched Web Story Wiped Out UAL’s Shares” [Forbes]
(Photo: Cubbie_n_Vegas)
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Like celebrity obituaries, I’m sure the news outlets have the “United files for Bankruptcy” stories ready to go at the click of a button. Somebody just got a little ahead of themselves!
Hmmm… somethings wrong here…
@ceejeemcbeegee: Easy to find out if there are shenanigans.
- Who was selling short today?
- Who bought at the bottom?
Maybe it was an inside job and some smart guy bought a lot of stock at $3
@RickScarf:
The SEC will probably investigate and any large buys will be scrutinized for connections with the paper.
I’m wishing I had been that smart guy.
That had to suck. As much as I hate the airlines, they really do not need any more grief.
And I was just having a discussion with a friend who works at a local paper on how poorly their website and DNS was managed. I’m sure this was an error on someone’s part, but they will never know for sure because these websites are poorly run and asking for an exploit.
Buy low sell high? Perhaps someone at the paper was interested in buying stock and found a great not exactly illegal way to do so?
Wow… if shareholders are that skittish, why didn’t they just dump the dog to begin with? Don’t they read Consumerist to find out how awful corporate is?
@timmus: If the bought the shares a while ago, they may be waiting it out to see if they can at least get their money back. But upon seeing a bankruptcy, they finally executed. Stocks are about math, predicting, and patience.
@timmus: I’m not sure if selling quickly when a stock loses 75% of its value in a few hours is necessarily ‘skiddish’. Stupid, yes, but if there were limit orders in place, those sales may have executed automatically.
Looking at my Bloomberg machine, the stock traded below $8 for 10 min before trading was frozen. If someone took the report at face value, or had automatic sells in place in fear of a bad announcement, I can see that trade being rational to an investor with a low enough cost basis. A sell at $3 is better than a sell at $0.01 after all…
That being said, its probably best to get all of the information you can before placing sell orders on ‘hot news’. In the end that $3 stop loss ended up costing that investor $7.92 a share today.
not fun.
I guess that’s what happens when you set up a news site to automatically post crap that it finds in google alerts…
Wow – the market is really volatile right now. Maybe a good time to convert those stocks to cash.
@durkzilla:
Probably the worst possible time to to that.
Remember buy low, sell high.
…that would be selling low.
I don’t think this was a mistake. Someone probably “messed up” in order to profit off the drop in stock.
@innout3x3: I’m thinkin the same thing, perfect opportunity for someone who bought the stock short, and got tired of it waiting to fall…
Time to buy?
@kingmanic:
Not United Airlines Stock. There is an old saying that the fastest way to become a millionaire is to buy $1 billion of airline stock.
I’m kind of being a thread-hog here, so I apologize.
It was most likely done on purpose, remember misinformation is a prime example of how people manipulate markets. Same thing that happened to Apple last year about the “missed” iPhone sales. Someone posted a few weeks ago a good article from Harvard on this, especially with the Internet facilitating misinformation for profiting.
Surely if I was going to induce a run on a stock, I’d think of a better way to do it than posting a 6-year-old news story with today’s date on it. I mean, who would have thought that would work?
You mean that there are inaccuracies on the internet? Say it ain’t so, Al Gore.
It so great that newspapers have figured out a way to stay in business.
Short the stock and run a bad news piece from the wayback machine.
Marvelous, simply marvelous!
Can you say Engadget!
So can the airline sue the news outlet for costing them so much money?
@dragonfire81:
Did Sam Zell need some fast moving stock today? It is likely that someone will go to the mattresses over this incident.
@dragonfire81:
“So can the airline sue the news outlet for costing them so much money?”
The airline is ok. It’s the stock investors who panicked over an internet story who lost so much money. The wiser investors were the buyers. It must be true. I read it on the internets.
I wish I knew about this one earlier! I would have loaded up on $3.00 stock shares.
There are much better stocks out there than airline stocks. Airlines don’t make that much gross margin and are highly subject to the rising cost of fuel.
Most of us don’t have all day to spend watching the stock market close/long enough to make the kind of snap trades like the one mentioned. Plus in order to really make any meaningful profit, you would have to either shell out a lot of your own money, or trade on a margin which is VERY risky.
Shame on you, Consumerist, for publishing hearsay:
Tribune Statement on ARCHIVED Story on United Airlines
CHICAGO, IL, September 8, 2008 — Tribune Company today issued the following statement regarding confusion created by an ARCHIVED Internet story on United Airlines:
“Our preliminary investigation into the events of today’s reporting on United Airlines revealed the following information:
“A Chicago Tribune story written in December 2002 regarding the United Airlines bankruptcy filing that year was apparently picked up by an investment advisory and research firm and republished as though it was current. The story was located in the archive section of the website of the Sun Sentinel in South Florida. The story contains information that would clearly lead a reader to the conclusion that it was related to events in 2002. In addition, the comments posted along with the story are dated 2002.
“To be clear, no story appeared today or over the weekend on the Sun Sentinel website or any Tribune website regarding United Airlines’ filing for bankruptcy.”
Damn, I wish I’d bought this at $3.
i’d think this would be a great basis for a lawsuit. Publishing false information lead to significant loss. Open and shut.