Before going on, I need to say this: United Airlines' parent company has NOT filed for bankruptcy.
For awhile there today, investors were afraid UAL Corp.--United's parent company--was on an inbound flight back into bankruptcy court. Why? Because a story on the South Florida Sun-Sentinel web site--owned by the Chicago-based Tribune Co.--reported the airline was filing for Chapter 11 bankruptcy reorganization.
One problem: That story was dead wrong. The posting was a six-year-old Chicago Tribune story with the date changed, according to a very ticked-off UAL. The inaccurate post's headline was picked up by Bloomberg , Wall Street's electronic bible, and within a few minutes a sell off occurred and UAL's stock plummeted from about $12 per share to nearly zilch--until trading was halted. Amid the craziness, the post and headline were taken down.
UAL is demanding Tribune management, led by CEO Sam Zell, conduct an investigation and reveal what happened. I suspect the NASDAQ, which makes a market in UAL shares and where today's trading is being reviewed, will also want to know how this debacle occurred. Maybe securities regulators will start asking questions, too.
Considering the fallout and damage to UAL and investors, Tribune Co. should examine this problem and make its findings public. Here's a few questions to start with:
Did someone screw up? If so, how and why?
Was it a systematic breakdown? A software problem? Did an online producer simply click away and not understand the importance of the story? Was there a lack of management oversight that allowed this story to be blasted into cyberspace?
More troubling, was it intentional? Knowing how Internet rumors can pollinate, did some knave decide to sell short and make a killing?
What can be done, so this doesn't happen again?
I'm not talking witch hunt or publicly pillaging some content producer who didn't know any better. Nor is this meant to sound sanctimonious. Having been in business journalism for a long while, I know bad things can happen to anyone at any time.
But let's not be too empathetic. With millions of dollars at stake--along with the Tribune Co.'s credibility--everyone linked to this faulty process should be called on the carpet. At the very least, TribCo web producers should be put on notice about being extra careful when handling reports of bankruptcy, bank failures or issues pertaining to the solvency of a business.
TribCo.'s not alone. Bloomberg needs to question its decision to pick up a bankruptcy report on a Chicago-based airline from a Florida newspaper's web site. That's the type of story that should ring alarm bells, no? But I can speak from experience and say Bloomberg takes its relationship with users very seriously, so expect some quick corrective action there.
What happened to UAL today was a run on the bank--except it wasn't depositors asking for their money back, it was investors.
And UAL didn't need to add to its list of woes.
This is a company struggling with labor strife, increased fuel costs, and passenger unrest. Who can blame it for being angry, even if its stock has rebounded?
The popularity of the World Wide Web may have lured media executives into thinking that news is a mere commodity, or worse, that it doesn't matter what appears on the Internet because it's a blip in time and cyberspace.
Today's UAL screw-up should help put that fable to rest.