United Airlines Fake Bankruptcy: What If It Was Not an Accident

by Hank Coleman

A six year-old news article appeared on September 8th breaking the story that United Airlines was filing for bankruptcy. Immediately the stock took a nosedive going from an opening of $12.17 to a quick low of $3.00. But, what if the story wasn’t an accident? Short sellers could have had a field day.

A news article appeared on September 8th breaking the story that United Airlines was filing for bankruptcy. Immediately the stock took a nosedive going from an opening of $12.17 to a quick low of $3.00. Rightfully so except….

 

 

The article was originally printed six years ago! A six year-old Chicago Tribune article about United Airline’s 2002 bankruptcy filing was found on the South Florida Sun Sentinel’s website with the date changed to this past Monday. The story was then republished by several other news and financial organizations. The story eventually made its way onto the newswires through Bloomberg.

The company’s stock dipped 75% in the matter of minutes until trading was halted midday. A lot of the selling was attributed to people having automatic sell orders in place. Once the severe selling took place, it just snowballed. The stock quickly rebounded before the close of the day’s trading and was written off as a computer error. The stock finally closed at $10.92 on Monday, down 11%. Other major airline stocks also fell Monday as well.

I’m sure that it was most likely a computer glitch, a downfall of living in such an intertwined technological era. But, what if it wasn’t an accident? What if this was an elaborate ploy to make some quick money? What if someone had shorted the stock and then “accidentally” posted a story, got a friend to post a story, or planted a false tip to a reporter about the airlines about to file bankruptcy? This would surely make a very cleaver ploy. It would be kind of like a reverse pump and dump of a penny stock. Short the shares, claim that there is a calamity waiting in the wings, stir up some hype on the internet, and then rake in your dough when to stock tanks before the market has a chance to understand what is really going on. It’s an interesting idea, isn’t it?

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