Old United Airlines Bankruptcy Rumor Sparks Sell-OffOuch. Talk about the past coming back to haunt you in new and terrible ways. So what happened? Assembled from multiple sources:
by David Schaper
A 2002 news story about United Airlines filing for bankruptcy was re-posted Monday on the Internet. Investors apparently thought it was current news and started a huge sell-off of the stock before trading was halted.
- An researcher for "an investment advisory and research firm" used Google to identify new bankruptcy filings.
- The individual found the story about United (which is apparently credited to the Chicago Tribune circa 2002) on the Sun Sentinel Web site.
- Thinking it current, they sent it to a little financial news site called Bloomberg.
- This 'news' sent United's stock down, "75 percent from $12.30 on Friday to less than $3. It eventually climbed back up to $10.49;" (Google News snafu leads to airline stock plunge, CNET)
Again, ouch. United did issue a statement (searching for a link) that this was not the case and called for an investigation. Their stock stopped plummeting, and started to recover.
According to Old news report jolts United Airlines' stock, a Tribune Company statement included:
"The story was located in the archive section of the Web site 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."
At time of writing, there's no mention of this on the homepages of Bloomberg.com, the Sun Sentinel site, or United.com.
For discussion's sake:
- Clearly lead a reader to the conclusion. (emphasis mine) The Sun Sentinel piece didn't clearly state that it was from the archive? Do people check the dates on reader comments? The Tribune Company pulled the story in question from its online archives at some point yesterday, so if you can nab a Wayback version, let's see if it would clearly lead a reader to the conclusion.
- Should the securities researcher who originally found the article done a fact check before sending?
- Were the Google results part of the problem or is Google just a tool?
- Are the discussions around consumer confidence even valid? Should investors pause to do research, or should they capitalize on quick information via multiple communications?
As someone who works with an online news site, I'm very interested in the discussion and thoughts about a story like this.
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Julia Schrenkler
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Minnesota Public Radio
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Comments: 8
Google is a tool. If a reporter is using google to find his or her facts, then s/he must verify her information with, imo and ime, three separate, reliable sources. It's just good practice to do it right.
I'm wondering about the liability of the person who started the mini-panic.
Joseph H., you had an interesting point: "The internet is a great place to get info, but you need to verify. Especially when you are basing your decisions on what you read." Should we add, "especially emotional or financial decisions" to that? It isn't just United that took a hit...
"It's not just the internet, being a consumer of news you have to be careful of your sources and diversification is a must!" - Winston Smith Good point that covers just about anything. I wonder how many people trust Bloomberg.com as a sole source?
Great question Julia. My journalism news groups were all abuzz about this issue. My vote is to use actual dates as part of the byline on every story (not dates that are updated automatically to reflect the current day, a strategy used by many sites to maintain the image of "currentness").
Ms. Meacham: Money Maven interesting suggestion, sounds like the evolution of news. I'm just reading this article from the LA Times Staff and Bloomberg News:
The article is dated September 11, 2008 FWIW.