The US Securities and Exchange Commission has opened a “preliminary inquiry” into how an outdated bankruptcy story sparked a $1 billion run on an airline’s stock value.
The article about how United Airlines filed for bankruptcy in 2002 was revived when it showed up on a newspaper site’s “most viewed” section on Monday.
From there it was picked up by Google News and later seen by alarmed stockholders. The stock plunged from around $12 to just $3 a share before trading was halted.
The Chicago-based company’s shares did not fully recover once trading resumed on Monday, and were still down at just over $11 dollars at close of trading yesterday.
With the possibility of legal action in the air, those involved have been hotly disputing who was to blame.
The errors provide a salutary lesson for investors of the power and perils of computer automation and throw a spotlight on Google’s News search technology which, using “Googlebot” algorithms, scours web pages in search of news articles.
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