Did You Catch AA Stock take a Dive?

[sidster]

American Airlines stock and operations company UAL took a dive on September 8th, 2008.

What caused it? A false story from 2002:


source:

False Bankruptcy Story Sends United Airlines Shares For A Ride


September 8, 2008 3:33 p.m. EST

Mitchell Jaworski - AHN Reporter

Chicago, IL (AHN) - Shares of American Airlines operator, UAL Corp plummeted at 11 a.m. ET when a bankruptcy filing from 2002 surfaced on newspaper website. Trading in the stock was halted briefly to allow UAL to address the issue.

The old news report showed up on the website of the South Florida Sun-Sentinel. Income Securities Advisors got wind of the story and distributed the report to financial news provider Bloomberg.

Once the news came across Bloomberg, UAL Corp, along with its competitors, saw their stocks dive. When trading resumed in UAL Corp, shares were down 7 percent, well off the session low.

"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 said in a written statement, according to the Associated Press.








So what do you make of this?

 

[danberkeley]

Some people lost a lot of money. Some people made a lot of money. The whole event happened within a 10 to 15 minute period. I doubt many traders were able to react fast enough to it.

 

[jonahtrainer]

So what do you make of this?

There has to be someway to make money off the worthless newpapers!

 

[DrCap]

I interpreted this as showing just how scared the market really is. One rumor/false news story caused United to lose 99% of its value and caused the whole industry to fall apart.

Shows you also how fast all of this can come unraveled.

 

[Knighted]

It's remarkable to think that so many people headed for the exits at the same time. Surely we are not just talking about gullible individual investors here, but also professional money managers. All over a rumor? How could that happen?

To me, it reeks of market manipulation. I wouldn't doubt that someone or a group of people orchestrated that and came away with a few million or billion dollars more in their pockets. Find out who they are and throw them in jail, where they belong.