Posted on Monday, September 15 2008 @ 2:35 CEST by Thomas De Maesschalck
Wall Street Journal reports Google News
is to blame for (temporarily) evaporating $1.14 billion of United Airlines' value on the stock market. The news crawler indexed a reprint of a report from 2002 when United Airlines was on the brink of bankruptcy - which resulted in a drop of the firm's stock from $12 to $3.
"The Wall Street Journal reports that Google News crawled an obscure reprint of an article from 2002 when United Airlines was on the brink of bankruptcy. United Airlines has since recovered but due to a missing dateline, Google News ran the story as today's news. The story was then picked up by other news aggregators and eventually headlined as a news flash on Bloomberg. This triggered automated trading programs to dump UAL, cratering the stock from $12 to $3 and evaporating 1.14 billion dollars (nearly United's total market cap today) in shareholder wealth. The stock recovered within the day to $10 and is now trading at $9.62, a market cap of $300M less than before Google ran the story."
