UAL Corp. NASDAQ: UAUA) shares were halted Monday following rumors the company was filing for bankruptcy.MarketWatch is reporting that UAL said the rumor is completely untrue.
Apparently, an old news item on United Airlines filing for bankruptcy somehow resurfaced on the Chicago Tribune newspaper Web site, CNBC reported. The sell-off nearly wiped out the company's share price, as UAUA, which opened trading at $12.17 this morning, plummeted (according to original reports) 99.92% to 1 cent before being halted. Since then most reports say the stock plunged 76% to $3 (see update for clarification).
[Update 12:35 pm: United issued a statement, saying that the bankruptcy reports are "completely untrue," and that it was actually the "irresponsible posting of a 6-year-old Chicago Tribune article by the Florida Sun Sentinel newspaper website with the date changed" (not on the Tribune site as CNBC reported).
While several sources, including Bloomberg, have UAUA stock plunging to 1 cent on the rumor, most now, including the Nasdaq site, have $3 as the low.]
This isn't the first time rumors in the age of the Internet have caused stocks to plunge, even whole markets. Just recently, Bloomberg had its own snafu when it inadvertently published its updated obituary for Steve Jobs, Apple Inc.'s (NASDAQ: AAPL) CEO. While that didn't cause any reaction as it was caught in time, last year, markets crashed because a website reported of an imminent U.S. strike of Iranian nuclear installations.
The problem with the Internet is twofold: a) once online, stories exist somewhere on the web and can therefore resurface as news accidentally, and b) once published, stories are immediately available to a very large audience, thus impacting markets and views.
Traders, as always, reacted very quickly to these rumors, nearly wiping the UAL stock out completely. The reaction was so severe that some even suggested more than just simple legal trading in reaction to the rumors may have been going on. Investors, who also love to react to rumors and trade on them but may be slower than traders who have immediate access, can often find themselves on the wrong side of these rumors. It seems that regardless some investigation into what happened today might be in order.
Trading has resumed in UAL stock and UAUA has last traded down 7.32% to $11.40 at 1:04 p.m.











Reader Comments (Page 1 of 2)
9-08-2008 @ 1:39PM
Howard said...
If it were not for all the people and families that would be hurt, it could'nt happen to a better airline. Ever sence Pan Amm went away and UAL went international the quality, service and all aspects of flying have been taken away by UAL. They need to go belly up.
9-08-2008 @ 2:01PM
Frank said...
Fly me to the moon..let me swing among the stars....
9-08-2008 @ 2:02PM
Brian said...
Investigate? Are you kidding? This is just business as usual and the SEC never does anything. Corruption is at an all time high and why would it not be, when every law on the books is a joke since the supposed watchdog does nothing. Interesting how the state attorney generals were the ones to sue the banks to get them to pay back the billions they defrauded.
9-08-2008 @ 2:24PM
basketpam said...
Wow, just look what damage the media can do when they get it wrong, AND, they get it WRONG ALL THE TIME. I really don't think this is what the founding fathers intended when they us freedom of the press. This freedom has been so abused and misused in this country I know those founding fathers just roll in their graves at night.
9-08-2008 @ 3:05PM
adb said...
The "free" media is no more. It is owned by corporations, so diversity of opinions has disappeared. Personal reponsibility has also disappeared. Reporters today are a bunch of hacks steeping on each others tails to get to the top. They were supposed to be guardians of democracy, but instead they have been morphing into a cancer eating away at democracy. Just look at their performance in the political arena. Reporters are so far gone they themselves do not see it. Is it any wonder massive errors of the UAL type happen ?? They don't care. Remember the New York Times and their star reporter caught fabricating news. Is it any wonder ?? ENRON at least could be solved. How do you get rid of a malignant cancer passing itself as benign??.
9-08-2008 @ 3:23PM
Jackie said...
I am glad, now they know what Barack Obama feels like with all of the lies circulating. Don't get me wrong, cruelty is cruelty.
9-08-2008 @ 4:19PM
Chuck Harvey said...
It is always easy to blame everyone's problems on the media. Reporters are expected to get the facts right. They are constantly pressured by their editors to do so. But most newpapers and other publications have cut their staffs to the bone. That makes it much harder to double or tripple check information. Also, many people in high places hide from the media. Consequently, reporters must seek other sources that might not be as reliable. Part of the problem is that news sources are expected to be like PR agencies and only print fluff. That is not the calling of the media and never should be. Most reporters still do a good job in keeping politicians and business leaders honest. It is a thankless, underpaid job that really does take some talent -- especially in a country where many have trouble just speaking proper English.
9-08-2008 @ 4:05PM
Middle Class said...
AARP MEMBERS!...................... NEW YORK LIFE PRESIDENT, SY
STERNBERG ROUTINELY MEETS WITH CORRUPT DEMOCRAT POLITICIANS IN
MONTANA. THESE CORRUPT BSTERDS ARE GOV. SCHWEITZER, SEN'S TESTER AND BAUCUS. A "PORK" FUNDED COMPANY CALLED "MSE" is located in the town of BUTTE, MT and has been SOLELY funded with TAXPAYER DOLLARS SINCE ITS INCEPTION............................................ (google: Pork MSE Tester Butte Montana) Most of the players who are a part of MSE have become NEW YORK LIFE AGENTS......................................................................MSE WAS FOUND GUILTY by the "U.S. FED's" OF "MONEY LAUNDERING "AND FUNNELING THAT MONEY TO DEMOCRATS IN MONTANA IN 2001. This "Pork" funded company is supporting Obama with YOUR TAX DOLLARS LAUNDERED THROUGH NEW YORK LIFE INSURANCE and it's President SY STERNBERG
9-08-2008 @ 4:16PM
Rebecca said...
Unfortunately, reporters have to meet the demands of their networks. Ever since the onset of CNN and FOX News, we have watched the networks sell their souls, morals and values for their Nielsen ratings. It's not about journalism or professionalism anymore. It's all about ratings and money. Good ratings bring big advertising revenues. Great ratings bring awards and accolades. There is no moral or ethical cost too great for the good of the network. Until viewers learn to think for themselves and say no more to the network producers, it will only get worse. While that sounds simple enough to accomplish, the vast majority of Americans are too lazy to think for themselves and too disengaged to recognize through the power of their voice and actions, change can and will take place. It's this type of apathy that gave Hitler the power to murder over 6 million Jews. The real lesson is that if you don't use your voice, you will eventually lose your voice.
9-08-2008 @ 4:23PM
jensnaz said...
Sure sounds like a Barry Obama thing!
Of course his Good-ole-boys will always support him. Reasoning; He's Black and everyone is affraid of him squealing "Racist". I'm black and your brow-beating me! Poor poor Barry.....LOL
9-08-2008 @ 4:30PM
cmd said...
if these traders weren't all paranoid from all the coke they snort this wouldn't happen
9-08-2008 @ 4:41PM
Dean Jackson said...
What other corruption comes from Chicago? Oh that's right. Obama
9-08-2008 @ 4:53PM
I.V.Moore said...
Yup! Seems like too many folks arn't afraid of Hell or God anymore. Leave God out and He leaves you out. Without the fear of God and the Bible, there is no standard and not much ethetics if any. Return to God and he will return to you as an individule and as a country.
9-08-2008 @ 5:17PM
Scott said...
Chris Cox must be on someone else's payroll. Or, maybe a traitor working for some other nation's interests. I have been all over him about how a lack of controls was allowing financial terrorism against our financial infrastructure. Intentional false rumor spreading was on my list to him -- with two dozen examples, many tied back to foreign interests. A simple uptick rule would have prevented this manipulation of UAUA. I hope UAL sues the SOBs involved in this and that CFOs from all American companies band together to nail the short/rumor scum.
Oh, and now Paulson gives the GSE shorts a $7 billion bonus today. This is pathetic!
9-08-2008 @ 5:29PM
John said...
Gimme a good ole' horse n buggy - no terrorism there....
9-08-2008 @ 5:46PM
Joe said...
NObama???...United????...I dont seethe tie in. NObama is the antichrist....UA is just a lousy airline that needs to disappear.
9-08-2008 @ 6:23PM
Joseph Brenner said...
So, is it time to buy in, before it recovers?
9-08-2008 @ 7:29PM
Mike said...
Another great example of our pathetic, do-nothing, self-serving government at work. Who the hell is running the asylum - obviously no one!
9-08-2008 @ 7:30PM
Dennis said...
Pulitzer prize was tarnished and is meaningless in this century of the media. Lies, distorsion,convoluted reporting are the standard fair. They lost it when big business and greed took over to climb to the top of the dung heap. I thought reporters were there to protect our republic. That's another fairy tale like the cherry tree. Journalist are lower that used car salesmen or snake something. What are we teaching in our predominatly socialist colleges today?
9-08-2008 @ 7:40PM
Christianne said...
Let's see, I could have purchased 1000 shares for 10 bucks this a.m. and sold them this p.m. for at least 10 bucks a share and made $10K for sitting home doing nothing. Market manipulation does not exist per the SEC. The SEC is a joke, my dog can do a better job sniffing another dog's butt than the SEC can do with all the big market manipulation that goes on today. It is a spectator sport.