United Airlines Falsely Reported Bankrupt on Bloomberg.com; Stock Plummets to $3 per Share

United Airlines Falsely Reported Bankrupt on Bloomberg.com; Stock Plummets to $3 per Share

www.washingtonpost.com

A six-year-old article mistakenly seen by Bloomberg financial news users yesterday reported the bankruptcy of United Airlines and triggered a massive sell-off that nearly obliterated the company's stock in a matter of minutes.

The light-speed wipeout is a powerful reminder of how quickly bad information can spread via the Internet to a trigger-happy Wall Street that is willing to dump millions in stock before checking the facts. And it showed how the imperfect technologies of Internet search combined with human failure can cause ruinous results.

United parent company UAL opened trading on the Nasdaq Stock Market yesterday at $12.17 per share. The 2002 bankruptcy article appeared on Bloomberg monitors on Wall Street just before 11 a.m. In the minutes that followed, some 15 million shares of UAL traded and the stock plunged to $3 per share. Trading was halted at 11:30 a.m. for an hour. The stock closed down $1.38 at $10.92 yesterday.

(visit the link for the full news article)

A reporter at a Bloomberg affiliate finds an article from 2002 about UAL's bankruptcy using Google's webcrawler, which posted a current date, and without fact-checking puts it online as breaking news through Bloomberg. The result: UAL's stock plunges 70%, dropping to nearly $3 per share on the NASDAQ.




A cautionary tale of how easily and nearly instantaneously false or misleading information can spread, and how damaging it can be, and also how sloppily run news services, even giants like bloomberg, can be. Reader beware.



www.washingtonpost.com
(visit the link for the full news article)

[edit on 9-9-2008 by gottago]

Or of how a few select people can orchestrate something to make them millions.

'' ill make United go to 3$ tommorow, when it drops, put in a mil, by the end of the day, you'll be happy ''

reply to post by gottago


Interesting. Can you imagine a savvy investor, buying at $3 just before Noon....and turning more than a 300% profit by the end of the day?

Seems very suspicious....

reply to post by weedwhacker


^Both excellent points.

You have to wonder at the knee-jerk selloff by trigger-happy traders who didn't bother to verify the news, which was doubtless amplified to a blitz by programmed trading kicking in. A perfect storm and I'm sure lots of money was lost and made in a few minutes.

And how lax Bloomberg's internal editing controls are, allowing for such a monumental gaffe--or manipulation.

Good time to buy then when it is artificially low valued. Someone made a killing.

I don't get it, I thought they have been bankrupt for years this airlines has been having problems and we all know it, their quality of services is down the craper.

And they are outraged by an old article because it said that they are not "actually bankrupt".

I tell you somebody is playing with the markets for profits and that shows what a clown wall streets is right now and how easily manipulated is by anybody.

Pure market manipulation.
It happens all the time.
There is agencies supposed to investigate it but they are just as corrupt and in on it.

Here's an article with more info on who posted the article initially and the blame game after this crazy day for UAL...

Tribune, Google trade blame in United Airlines stock fiasco

....UAL blamed the mess on a posting of a 2002 Chicago Tribune article on the South Florida Sun-Sentinel's website.

The story then was picked up by Income Securities Advisors, a Florida investment newsletter, and disseminated as a one-line brief over Bloomberg News -- triggering a wave of panic selling.

Tribune Co., the owner of the Sun-Sentinel (and also the parent of The Times), initially pointed a finger at Google Inc., saying it appeared that the search engine highlighted the story out of the Sun-Sentinel's archives over the weekend, which generated traffic and caused the newspaper's computer to move the story to a page of most-viewed articles...

In the blink of an eye, or the pressing of enter on a keyboard...

...billions at risk..

A little too scary for me...

Was it an error? was it intentional? either way it doesn't sit well this morning.

As I posted in another thread, this is the Wall Street version of robbing a Wells Fargo truck full of cash!

The first individuals that need to be investigated are the analyst of the no name investment advisory firm in Miami that comitted the "error" and then all those who held short positions on the stock, definately someone made millions or perhaps billions depending on the volume of trading when the event took place and if you look at the volume chart you can see that it was through the roof when this news were leaked.

[edit on 9-9-2008 by Bunch]

Oh yeah, someone made some cash Intentionally or not, someone got lucky. Wish I had foresight.

Originally posted by Agit8dChop
Or of how a few select people can orchestrate something to make them millions.

'' ill make United go to 3$ tommorow, when it drops, put in a mil, by the end of the day, you'll be happy ''

The Nasdaq rolled back some of the trades, but not all of them...I actually own put options on CAL and had I know why it dropped 25% I would have dumped them and reversed my trade making a massive profit, someone with a quick trigger finger or other information on the even could have quickly made tons of money in the options market. Forget trading the regular stock my CAL puts soared 300% alone, There were probably options out there that hit 1600%+ in gains.

Here's the 5 day chart from UAL. The thing I want to know is the spike in volume was probably from people selling however, what % of the volume was being bought at the low price and was anyone buying in bulk? Im sure the SEC will have to investigate this.

reply to post by secret space


Doubtless the vast majority of that trading spike was from programmed trades that kicked in automatically, and big traders who knew what was up.

[edit on 12-9-2008 by WyrdeOne]

[edit on 12-9-2008 by WyrdeOne]

reply to post by WyrdeOne


WyrdeOne....I think the sad thing is....the USD ($) compared to....I assume you're on the GBP? Well, it's getting very close to a USD equalling about 3 pence!

Not very good news for us 'mericans, as we come to visit the UK next November. Already had 'sticker shock' last July, in Scandanvia.

For anyone who is trading in airline stocks: I certainly hope you know what you're doing. (I used to work in that industry)

There's an old joke: How do you make a million dollars in the airline business? You start with five million dollars......