Automated news program nails United Airlines stock

It’s a little old by now, but this is an interesting story about how automated news crawling wiped $300m off United Airlines’ market cap. Basically this is what happened:

  • Back in 2002 United Airlines was on the brink of bankruptcy – that obviously made the news
  • For some reason an old story became popular on the South Florida Sun-Sentinel newspaper website – it got put back onto the front page but without a date
  • Because there was no date the Google News crawler picked up the story and put it onto today’s news
  • Several other news aggregators picked up the story and it “eventually headlined as a news flash on Bloomberg”
  • That triggered automated trading programs to sell-sell-sell
  • The selling spree wiped 1.14 billions dollars off of United’s market cap
  • During the day stock recovered but ended $300 million down

Crazy stuff.