United Shares Fall to Nothing

Yikes, we’re supposed to fly home on United tomorrow. That’s not such good timing. Good thing I brought an extra set of clothes…

Shares of United Airlines lost nearly all their value Monday morning when a false rumor swept financial markets that the struggling carrier had filed for bankruptcy protection.

In a statement, United said the rumor occurred when the Web site of The Sun-Sentinel, a Florida newspaper, posted a six-year-old story from The Chicago Tribune archives about United’s previous bankruptcy filing. The airline operated under bankruptcy protection from 2002 through 2006.

“United has demanded a retraction from The Sun Sentinel and is launching an investigation,” the airline said in a statement.

On its Web site, however, The Chicago Tribune reported a different set of events. The Tribune said a reporter for Income Securities Advisors, an investment research firm based in Miami, found a Tribune article in the Sun-Sentinel archives during a search for information about bankruptcy situations. The reporter at Income Securities posted the article to Bloomberg News, and the rumor then spread rapidly, The Tribune said.

The article did not appear on the Web site of The Chicago Tribune or The Sun-Sentinel, people with knowledge of the situation said. The Tribune said it had removed the article from its archives.

[From United Shares Fall on False Bankruptcy Report – NYTimes.com]

The share price has nearly recovered however as of this afternoon, and somebody made a ton of cash shorting, then repurchasing shares. I wonder if there will be a criminal investigation? Also, I presume there will be a lawsuit filed against the Sun-Sentinel by United Airlines.

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