The error was stunning. The results were more stunning.
On Monday morning shares of UAL Corp., the parent company of United Airlines, plummeted more than 75% at one point. The company’s market capitalization, or the combined value of all its outstanding shares, fell by almost $1.2 billion in a period of just 15 minutes.
The dramatic fall in UAL’s stock was the result of errors, both human and artificial. The parties responsible include newspaper publisher Tribune, search giant Google, financial information provider Bloomberg and investment research firm Income Securities Advisors.
Here is what supposedly happened.
UAL filed for bankruptcy in 2002 and exited bankruptcy in 2002. The story received wide coverage at the time. In the wee hours of Sunday morning, someone pulled up a 2002 story about UAL’s bankruptcy on the website of the Tribune-owned Florida Sun-Sentinel. (The story was originally published by The Chicago Tribune, which distributed it to its sister publications.) The sparse traffic on the Florida Sun-Sentinel’s website at the time meant that the story was pushed into the “Most Read” column in the middle of the night.
Come Monday morning, the story appeared in Google News’ search, suggesting that it only had recently been published. The story had no timestamp and appeared alongside stories related to the current Hurricane season. An analyst at Income Securities Advisors saw the story and wrote a recap of it. He then published a two-line summary on Bloomberg’s terminal system, which is used by professional investors to gather research data, and through which Income Securities Advisors sells research. A journalist at Bloomberg saw the Income Securities Advisors headline and recapped it, sending out a story out under the Bloomberg name.
Income Securities Advisors was swamped with calls once the headline went out and quickly withdrew the story when it became apparent what happened. Bloomberg also withdrew its story and published a correction. UAL representatives were quoted in the Bloomberg piece and had a press release out within an hour of the original headline hitting. The NASDAQ, however, had halted trading of UAL shares by this time.
And that was that. A six-year-old story sent a stock into a tailspin. The Securities and Exchange Commission has launched a preliminary investigation.
In the wake of the incident, Tribune has gone on a public relations offensive, saying that Google’s “crawler” was responsible for bringing the six-year-old story back to the masses because it pulls out stories based on traffic. Google has countered, saying that if Tribune’s story was properly timestamped, none of this would have happened. Bloomberg and Income Securities Advisors explained their part in the controversy quickly, and the focus has moved away from them.
I feel UAL’s pain because something similar happened to me, coincidentally, six years ago.
One day in October 2002 my website was suddenly flooded with traffic. I began receiving nasty emails from people who said I was making something up and calls from the media seeking comment about a report I had posted. As I told everyone who inquired, the story in question was a year old at that point, something that the dateline on the story made blatantly obvious. In additional, everything I had reported was later confirmed by the organizations in question.
What had happened was that someone doing research had stumbled across a story I had written exactly a year earlier. A brain freeze, or something similar, caused the researcher to forget what year it was. He sent my story to a well-known blogger who, without doing any additional research, tore into me. The story was picked up by other bloggers, many of whom also criticized my report.
Luckily, the members of the “mainstream” media were wise enough to call me first, but some bloggers were unapologetic and wouldn’t update their stories with the facts. This resulted in negative public relations for my website and took months for some of those stories to become buried deep within the search results for my brand.
How the UAL story ultimately plays out will be interesting to watch. I’ve experienced similar problems with Google News as old stories suddenly appear in search results. I’ve also been to more than one media website, including blogs, where timestamps and datelines where not present or were simply the day’s present date, regardless of when the story was published.
Public relation nightmares can appear out of the blue and be caused by something as simple as a timestamp, or a search result, or an inaccurate headline. You have little defense against these lightning strikes except to be prepared. To do so, you have to monitor media coverage of your company strictly and be ready to issue a statement.
This article, written by Ben Silverman, originally appeared in PR Fuel (http://www.ereleases.com/prfuel), a free weekly newsletter from eReleases (http://www.ereleases.com), the online leader in affordable press release distribution. To subscribe to PR Fuel, visit: http://www.ereleases.com/prfuel/subscribe/.