Analyst Misinterprets Date On UAL Story, Stock Nosedive Ensues

Here’s what really happened with United Airlines’ stock losing 99% of its value on that bankruptcy story from 2002 that people though was new. This is what happens when you let the robots do your thinking for you…

Wired’s Threat Level Blog reports:

A worker at a Miami investment advisory firm called Income Securities Advisors, which publishes news alerts that get distributed through the Bloomberg News Service, did a Google search on bankruptcies this morning and got back search results that included a six-year-old story published in the South Florida Sun Sentinel about the 2002 bankruptcy filing by United Airlines.

The employee mistook the news for a current story — despite the date clearly marked on it…and other information in the article “that would clearly lead a reader to the conclusion that it was related to events in 2002″ — and included it in a subscription newsletter that was distributed through Bloomberg.

…the article in the Sun Sentinel’s archive had no date on it. But when Google’s spider grabbed it, it assigned a current date to the piece, which then resulted in the article being placed in the top results of Google News. When the employee from Income Securities Advisors ran a Google search on “2008 bankruptcies,” the old United Airlines story appeared as the top link in the results, with a September 6, 2008 date on it.

As Joel Johnson intimates in his Twitter post, it seems more like a movie plot point than reality. It just speaks to how much the market has gotten into a mindset where it thinks “he who panics first, wins.” Stick with your long-term investment goals and let them lose their nails.

Six-Year-Old News Story Causes United Airlines Stock to Plummet — UPDATE Google Placed Wrong Date on Story [WIRED]
PREVIOUSLY: United Airlines’ Stock Temporarily Wiped Out By Old Bankruptcy Story

(Photo: Deseronto Archives)

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  1. SkokieGuy says:

    The most interesting part of this post is Ben’s comment “Amazing…this is what happens when you let the robots do your thinking for you.”

    How many of the outrages published on Consumerist are a result of companies letting computers and software do the “thinking” and replace human decision making and common sense?

    My I propose we label this DDS = Digital Decision Syndrome?

  2. melmoitzen says:

    Next thing you’re going to tell me is that there’s no truth to the upcoming PanAm/Eastern merger.

  3. anyone who was watching united’s stock and the wires and read the story in full probably made an #@#(%@ ass-ton of money, knowing that the stock would bounce, where as the people that panicked just proved the rule that no one ever made a dime panicking(tm jim cramer)

  4. sassbrown74 says:

    Funny how Google and the Sun-Sentinel have been getting all the blame. What about the Bloomberg guy creating a widely distributed news story based solely on a single report he found using Google? Was the “reporter” lazy or is it the Bloomberg model at fault?

    I used to publish an electronic newsletter based almost entirely on company press statements and other news outlets. If I was putting together a news report about a bankruptcy after being tipped off by another news outlet, I’d be looking for an original statement from the company so that my report would have at least a few different details. Had he done that, he quickly would have smelt that something was amiss.

    • @drgmobile: I’d be looking for an original statement from the company so that my report would have at least a few different details.

      That sounds an awful lot like good old-fashioned investigative journalism. I’m somewhat positive that that is out of style. I’m hoping it becomes “retro” soon, so people will start doing it again.

  5. moore850 says:

    at some point, wouldn’t a control on how fast you can turn around stocks be prudent? Especially on short sells?

  6. blackmage439 says:

    The Market did it once, it will do it again. It killed this country and it’s citizens (literally in some cases) by engaging in fear-mongering, illegal, and panicky practices during the 30′s. 80 years later, I see no difference.

    I consider the Stock Market to be a greater threat to this country’s stability than terrorists, foreign powers, gasoline shortages, or credit crunches. I don’t see myself ever investing in stocks. The Market is more volatile than an active volcano.

    • HIV 2 Elway says:

      @blackmage439: How do you suggest that companies raise capital then? The ability of firms to raise capital quickly and efficiently is the backbone of our economy.

    • ndonahue says:

      @blackmage439: Don’t shoot the messenger.

      The market isn’t anything but the aggregation of individual behaviors. Market volatility is an indicator of uncertainty in the general investor population (weighted by volume of controlled capital).

    • coolkiwilivin says:

      @blackmage439: I don’t think that’s the wisest decision. One of the most consistent returns on investment have been index funds. Yes we have economic problems but overall our economy has the ability to rebound and grow. There is a overall belief in “the american dream” that just doesn’t exist in other markets. Look at Stories in the International Herald tribune, There is a lack of hopefulness in many markets overseas that doesn’t exist here. Yes we have problems but we have an economy that rewards hardwork and innovation for now. If Obama gets elected well, hopefully even he can’t kill future economy or growth.

  7. LeoSolaris says:

    I’ll third the DDS nomenclature. That’s just too amusing to not get an abbreviated syndrome of it’s own.

  8. nicemarmot617 says:

    Panic seems to be the order of the day for Wall Street. That’s what happens when you hire people who are better at talking than they are at thinking.

    • Corporate_guy says:

      What I don’t get is why is everyone siding with the tribune and blaming google? The tribune posted the article without a date on it. 100% of the blame is therefore with the tribune. [www.pcworld.com]
      They claim they asked google to stop crawling their sites months ago because they noticed issues with how the googlebot crawled articles incorrectly. Of course that statement is 100% false because you don’t ask google to stop crawling your sites, you create a robots.txt file. [www.google.com] But if they did notice a problem, why didn’t they add dates to their articles to fix it?
      I just hope that those that had their stock automatically sell at 4 bucks will be able to go after the tribune for damages. A date should be included on any news article. In the past I have found articles online without dates and it is really annoying and can easily be confusing.

  9. I’m a kind of a stickler for citing sources, just because I like to be somewhat secure that I won’t look like a moron for getting my facts wrong. So because I’m always looking for citable sources I try to find the actual dates that articles were written. More and more often, websites, blogs, all sorts of media sites have articles with no date on them… It drives me absolutely bonkers. That and the used-to-be-a-big-no-no practice of citing anything other than original sources. It’s a mess of blogs linking to blogs instead of just linking to original stories…. but I suppose I digress…

  10. Oranges w/ Cheese says:

    Damnit! I coulda made a ton of money :(

  11. Parting says:

    If I’d known about, I would definitely profit :)

  12. SkokieGuy says:

    The day trading was halted, when the stock was at $2.50 a share, (around 12:30 I believe), the stock closed that day at over $10 a share! WTF?

    How does a stock go UP after trading is halted?

    • HIV 2 Elway says:

      @SkokieGuy: Just because formal trading in stopped doesn’t mean valuation efforts is halted. It happens more than you think, especially in more volatile foreign markets.

      • HIV 2 Elway says:

        @HIV 2 Elway Resurrected: are halted, jackass.

      • humphrmi says:

        @HIV 2 Elway Resurrected: Also, trading was halted because they figured out that the drop was being caused by a false story. Once trading resumed 90 minutes later, everyone started buying again for several reasons: (1) they had just stupidly sold based on a false story and wanted their position back, (2) PROFIT! UAUA hit one penny per share before trading halted based solely on the assumption that their stock was now worthless. One guy even reportedly made $4.8 million on September 8th by buying low, waiting for the resumption of trading, and then selling around $10 (which is probably why it didn’t hit it’s original $12 again – profit takers).

  13. weakdome says:

    seriously… I’m missing the “robot’s fault” part of this. The bloomberg guy didn’t see the CORRECT date, which was the old date… so it’s his fault, isn’t it? Google posted a CURRENT date on his story, which was technically new, just printed with old/incorrect information.

  14. There's room to move as a fry cook says:

    The sequence of events appears to be:
    1) someone visited the 2002 story on the Sun-Sentinel site
    2) that pushed it to the “Most Viewed” section on the Business page of the Sun-Sentinel site
    3) Google indexed the Business page

    [www.latimes.com]
    “Google, owner of the world’s most-used Internet search engine, said in a blog post Wednesday that the Sun-Sentinel story failed to include a standard newspaper article dateline but did have a fresh date above the story on the top of the page of “September 7, 2008.”

    “Because the Sun-Sentinel included a link to the story in its ‘Popular Stories’ section and provided a date on the article page of Sept. 7, 2008, the Google News algorithm indexed it as a new story,” Google said.

    The company said it removed the story as soon as it was notified that it had been posted in error.

    In an earlier blog post, Google said: “It has been widely reported that many readers were unable to determine the original date of publication of this article, and our crawling was similarly unable to recognize that the article was old.”

  15. darkryd says:

    Yep – our stock market system is so sound, that even a whisper of a rumor can bring the system crashing down.

    Way to be reliable and rational, Wall Street.

    • SkokieGuy says:

      @darkryd: I disagree. The fact that trading was halted within hours means that safeguards were in effect.

      I am only annoyed that I was unable to profit from this mistake!

  16. vladthepaler says:

    “Amazing…this is what happens when you let the robots do your thinking for you.”

    but…

    “The employee mistook the news for a current story…”

    So, you’re saying theres a robot writing Consumerist articles now? Cause if you’d read your own quote, you’d see that a person is at fault here, not a robot…

  17. TangDrinker says:

    I hope this analyst was fired. Google News? People, there’s a reason why Lexis Nexis should be used over free sources. If you really need to monitor bankruptcy news, you should NOT be using a free source.

    If you’re the source for the alerts – you damn well better back up your bankruptcy news by cross checking with the actual bankruptcy court. PACER only costs 8 cents to run a search!!!

  18. stre says:

    so a guy read the article and put it on a newsletter, then it was indexed as current news and then the guy searched for the article again and found it so at that point everyone freaked out? makes no sense to me.

    • coren says:

      @stre: Ben didn’t really make it clear – the article this is based on has been updated multiple times with different versions of the story being part of every update, conflicting versions at that

  19. coren says:

    I’m glad this got the headline switched so it was the user’s fault rather than Google’s

  20. Coelacanth says:

    DDS – The problems it creates rival the pain of getting your teeth pulled.

  21. The combination of events that lead to this clusterfuck brings this scene from Idiocracy to mind:

    RAUNCHO CEO: What happened?!

    JOE: Ah… Well, we switched the crops to water.

    RAUNCHO CEO: I’m not talking about that. Our sales are all like, down. Way down! The stock went to zero and the computer did auto-layoff on everybody!

    ATTORNEY GENERAL: Shit! Almost everyone in the country works for Rauncho!

    RAUNCHO CEO: Not anymore! And the computer said everyone owes Rauncho money! Everyone’s bank account is zero now!

    14-YEAR-OLD: (scared) I think that makes the economy suck!

    RAUNCHO CEO: What’re we gonna do?! Shit’s going crazy!

  22. the-perfect-face-for-radio says:

    remember, every analyst begins with “anal”.

  23. I’m frightened by the possible malicious exploitation of the aggregator ecosystem. Imagine if someone could introduce a fictitious story about one of the candidates on the morning of Nov 4th? Sure, such a popular story would be more likely dismissed than one that only really impacted professional investors, but the lightening-quick propagation of stories and the not-so-quick appearance of retractions could influence many before a correction was made. I’m not sure that this scenario is likely, but the mere possibility raises questions about media reliance on automated systems. We’ve already seen manipulation of the wire services to bias coverage of some modern conflicts, most recently Georgia ([blog.wired.com]), so this isn’t exactly in the realm of science fiction.

    • @AtomicPlayboy: This isn’t exactly in the realm of science fiction.

      It isn’t at all. We know that The Consumerist shows up in Google News, for example. All Ben needs is write a juicy story about his least-favorite candidate and see if it develops wings.

      (To nitpick, though, I think Nov. 4 is too late to influence the election, and anything before Nov. 4 is too early. And there’s no auto-voting routine that will change votes from A to B if a story on topic X comes out. The voting public as a whole is pretty discerning and takes voting very seriously.)

    • mac-phisto says:

      @AtomicPlayboy: that could never happen.

  24. EricLecarde says:

    I should have bought stock in the company when this happened. Oh well.

  25. johnnya2 says:

    Teh fact that people made any money and were allowed to have trades go through AFTER the story is the fishy part to me. What if I owned a news outlet and intentionally reported something similar and bought up tons of shares. The next day I say oops, my bad, and then I am a multi millionaire. All sales for that day should be considered ill gotten and reversed to original positions.

    • billco says:

      @johnnya2:

      I’ll step up the cynicism even further: I think the stock market should be abolished. It is no better than the speculative banking system that has created money out of nothing and has led the country to the edge of ruin.

      Let’s go back to a time where investors sought profits. Things were a lot less chaotic back then. In a world where announcing thousands of layoffs can make a man filthy rich, I can’t help but think the system has failed.