Media Error Causes Steep Loss for United Airlines
Technological glitches can come with a high price tag – as United Airlines found out on September 8.
According to The Washington Post, a six-year-old Chicago Tribune article about the airline’s 2002 bankruptcy was archived without a date on the South Florida Sun-Sentinel Web site.
Income Securities Advisor posted the story as new and disseminated it through the Bloomberg Professional service – an “Intranet limited to subscribers.” The misinformation was passed on, causing United’s stock to plummet, according to BusinessWeek.com.
“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,” the Post said.
The Sydney Morning Herald reported September 10 that United Airlines share price “tumbled from their $US12.30 closing price on Friday to just one cent by about 11am in New York when trading was halted.”
Trading resumed that day, and by NASDAQ’s close the stock was down roughly 12 percent to close at $10.92, according to Editor & Publisher (E&P).
“At United’s
Tribune Co., which owns the Sun-Sentinel and the Chicago Tribune, said the story was in the archives section of the Web site.
“The story contains information that would clearly lead a reader to the conclusion that it was related to events in 2002,” Tribune said, according to E&P.
