United Stocks Tumble In Wake Of Old News
By Marcus Gilmer in News on Sep 8, 2008 6:20PM
A six-year old Chicago Tribune story about United Airlines' 2002 bankruptcy filing caused United stocks to temporarily plunge Monday morning. A reporter from Miami-based Income Securities Advisors Inc. apparently ran across the old story on the South Florida Sun-Sentinel's website during a Google search, but the date on the story was inexplicably changed. Income Securities Advisors, Inc. then ran the story on the widely-read Bloomberg Financial Services website, causing United stock prices to plummet. Trading of United on NASDAQ was halted until the rumors could properly be addressed; United denied the rumors and demanded a retraction, saying in a statement:
[The rumors] were caused by the irresponsible posting of a 6-year-old Chicago Tribune article by the Florida Sun Sentinel newspaper Web site with the date changed. The story was related to United's 2002 bankruptcy filing, and United has demanded a retraction from the Sun Sentinel and is launching an investigation...United continues to execute its previously announced business plan to successfully navigate through an environment marked by volatile fuel prices and continues to have strong liquidity.United successfully exited bankruptcy in 2006.
In response to the story, the Trib removed the story from its website archive. The Sun-Sentinel's Deputy Managing Editor-interactive Joe Schwerdt, deputy managing editor-interactive for the Sun-Sentinel, "said internal tracking records show that no one at the paper had opened the original story file since 2003. The story would have been available via a search on the site, but no one outside the paper should have had access to the story file." The Sun-Sentinel is owned by Tribune Publishing, a division of the Tribune Company.
Exactly how much the prices plummeted is unclear: the S-T reports stocks fell from $12.45 a share to $0.01; the Trib says $3; Bloomberg claims shares only hit $8.47 before trading was halted. According to the chart at Bloomberg, the Trib's claim seems to be the closest. Stock prices quickly recovered upon retraction of the story. [Trib, S-T]