Updated: From Micheline Maynard, a DealBook colleague:
Shares of United Airlines plunged Monday morning when a false rumor swept financial markets that the struggling carrier had filed for bankruptcy protection.
Shares in the airline’s parent, the UAL Corporation, traded down more than 75 percent in late morning on the Nasdaq. Its volume was more than 29 million shares. Trading in United shares was halted at 11:08 a.m., pending news from the company.
Earlier, Bloomberg News carried a report from Income Securities Advisors that the airline had filed for bankruptcy protection. The report was picked up by industry Web sites, including Briefing.com and the Chicago Tribune’s Web site....MORE
From FT Alphaville:
...But not before skittish traders sent shares in United Airlines crashing from $12 — reportedly to one cent at one stage.
My favorite story of this type was back in the 'eighties. From a May 22, 2007 post:
...And here's a story from twenty years ago this summer (I hope this is fair use, I've got a reason for putting out the abstract found on Proquest, this story was class act journalism). I made a mistake in the post below, it appears the the securities analyst making the buyout offer was hospitalized subsequent (not prior) to the call to DJ:
Herd on the Street: 'Garbitrage' Bulls Go Mad By Brett Duval Fromson. Wall Street Journal. (Eastern edition). New York, N.Y.: Jun. 30, 1987. pg. 1
One week ago, a troubled Cincinnati man made a bogus bid for control of Dayton Hudson Corp. Paul David Herrlinger caused the retailer's stock to shoot up $9 a share hours before a family lawyer announced that Mr. Herrlinger was more crazy than rich. Investors who bought Dayton Hudson stock on the preliminary news wire reports found that by the end of the day they had lost an estimated $15 million.
