Bankruptcy Rumor Sparks United Airlines Sell-Off

RENEE MONTAGNE, host:

As if things weren't bad enough for United Airlines, yesterday the carrier had to spend much of the day denying it had filed for bankruptcy. A new story about the company's 2002 bankruptcy filing resurfaced on the Internet and sent the stock price crashing. NPR's David Schaper has more.

DAVID SCHAPER: This is what apparently happened. A reporter for a financial research firm googling new bankruptcy filings got as a first hit a story about United Airlines on the Web site of the South Florida Sun-Sentinel. Thinking it was current, it was posted on Bloomberg's financial news service. And within minutes, United's stock lost nearly all its value. But the story turned out to be almost six years old from the Chicago Tribune in 2002.

The research firm insists the Google story was dated September 8, 2008, and there was nothing to indicate it was really six years old. But a Tribune spokesman says the story's content was clearly related to events in 2002. United issued a statement saying the bankruptcy reports were completely false and demanded a full investigation. Its share price later recovered. But why was such a story so believable in the first place?

Mr. DAVID FIELD (Editor, Airline Business Magazine): I think that this is very clear evidence of very limited faith that the public and investors have in the U.S. airline system.

SCHAPER: David Field of Airline Business Magazine says airlines are posting huge losses this year, more than three billion so far for United. Still, there were no other indications United was considering a new bankruptcy filling. So, Field says investors should have known better.

Mr. FIELD: You have to ask yourself is this an airline story or is this an Internet story?

SCHAPER: And even facts on the Internet need to be checked out. David Schaper, NPR News, Chicago. Transcript provided by NPR, Copyright NPR.