5 Online Mistakes that Caused a Market Frenzy
1. United Airlines
On September 8, 2008, United Airlines stock fell 76%, from $12.17 at open to about $3.00 mid-morning.Â Why the collapse? Because a six-year-old story about UAL's 2002 bankruptcy filing was somehow re-posted online on the website of the South Florida Sun-Sentinel, a paper owned by the Chicago Tribune Co. It was quickly refuted and the share price recovered after a 90-minute trading halt. Oddly enough, the story was not dated 2002, but was dated September 8, 2008. The blame has been put on Google, whose spider saw it on the Sun-Sentinel, assigned the current date, and placed it in the top results on Google News.
2. Apple I
On August 27, 2008, Bloomberg inadvertently published its running obituary for Steve Jobs. The obituary was only posted "momentarily" and was "immediately deleted," though not before it was caught. View the 17-page obituary, the retraction made by Bloomberg, as well as notes for Bloomberg reporters here.
3. Apple II
Again, on October 3, 2008, CNN iReport, a user-generated site, reported a false claim that Steve Jobs had suffered a heart attack. The news quickly spread across the internet and the stock fell 10% in 10 minutes. An Apple spokesman had to deny the allegation. One he did, the stock picked back up within about 15 minutes.
4. Apple III
On May 16, 2007, Engadget posted a report that the iPhone launch would be pushed back from June to October. They retracted their comments, but in the meantime caused a $4 billon drop in Apple's market value. Engaget didn't just dream up the story; someone had passed on a fake email announcing the delay to the internal Apple staff. That letter was forwarded on to Engadget who then reported it on their site. Once the story was cleared up, the stock's value was restored and finished down only $1.40 at the close.
5. The Dow
On March 30, 2007, the Dow fell a few hundred points (unlike now, such volatility meant something back then). The drop was a result of a false report on an Israeli website of an imminent US air strike on Iran. The site also reported that US investors in Bahrain, an island country in the Persian Gulf, were advised to pack up their business operations and leave. Reuters issued a statement disproving the stories and the markets rebounded.
Be sure to read more of what Diana learned today here.