United Stock Tanks on False Bankruptcy Rumors

(MoneyWatch)  Holy cow. If you ever wondered about the volatility of the stock market, I think we've got a pretty interesting case study after United's stock dropped like a rock yesterday morning on bankruptcy rumors that turned out to be false. Take a look at this chart and see if you can figure out when the news broke:

Yeah, that's what I thought.

Initially, it was said that a Tribune newspaper in Florida reprinted an old article from 2002 talking about United's bankruptcy filing. Tribune has now clarified that by saying that apparently it was "picked up by an investment advisory and research firm and republished as though it was current." There's a more detailed article in the Chicago Tribune today detailing what happened.

Ouch. Someone is going to be in hot water after this one. But it's interesting to note that this one piece was apparently enough to send Wall Street on a selling spree. When I first heard it, it didn't sound possible to me. United has a fair amount of cash in the bank right now, especially after selling a bunch of prepaid miles to Chase. It would have surprised me were it true, but apparently others were not as skeptical. Clearly someone thought it could be true or they wouldn't have started bailing out of the stock.

So, in case it wasn't clear . . . none of this is true. United isn't filing for bankruptcy, but someone else is probably out of a job right now.