Not bankrupt today, says United

 

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Yes, we are not bankrupt today. That was the word from United late Monday morning when the airline was forced to make several public statements denying that it had filed for bankruptcy. United had little choice, because the markets, or at least the volatile traders who hold shares in the company believed the reports and had bid the stock (UAUA) down to penny levels. That‘s a nice drop from the $12.16 at which they started trading. Seems that a newspaper in Florida posted a story saying United and its parent UAL had gone into Chapter 11; they had, in fact back in December of 2002, and they came in February 2006. But readers of the South Florida Sun-Sentinel wouldn’t know that; someone or some program there had just changed the date on the story, which was in fact a Chicago Tribune piece. (The papers are both owned by the same company.)

 

United said said the reports “are completely untrue and were caused by the irresponsible posting of a six-year-old story.” The airline demanded a retraction “and is launching an investigation.”

wall_street_stock_exchange_narrowweb__300x468,2.jpgLate in the day, Tribune Co. said that an investment advisory firm had picked the story up from the Sun Sentinel’s archives and republished it “as though it was current.”


 

You have to ask if the story says more about traders or about the airline. A lot of the traders who hold airline shares are not what you’d call long-term investors; they are day-traders and funds that wait for major events to move the markets and then dump their shares in hope of quick profit. On the other hand, the fact that people were so ready to believe that United was back in Chapter 11 speaks volumes about the state of the airline industry and indeed the state of this troubled carrier. You can hear a wise man talking about this to Chicago Public Radio here; Left Field was also on the show. We were also on the CBS radio network.

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