Wild ride at United

Posted on 09. Sep, 2008 by in Featured

Yesterday was a wild ride for UAUA investers and employees no doubt. An article claiming United Airlines was going into bankruptcy swept through the internet faster than a 24 hour bug sweeps through a grade school. Panic, bedlam and lot’s of selling followed. One small problem; apparently it was a six year old article and obviously no one (or very few) on Wall Street read past the headline. Trading was halted, UAUA was valued at a penny, and I was scrambling trying to find a way to empty my piggy bank and buy as much as I could get. Alas, after calling my old college room mate (current CEO of a brokerage firm in MIA) I found out it was all a big mistake. Another opportunity to make millions lost.

Currently (according to the Chicago Trib.) Google and the Trib are pointing fingers at each other. And no doubt the United Airlines legal staff is licking their collective chops. These are side issues IMO to what the real story is; and it shows what are two huge problems right now in our economic malase.

1. The airline industry is so weak and has such a high level of “lack of confidence” that a mislabled article can crash (no pun intended) one of the worlds largest airlines in a matter of minutes.
2. Much more troubling is the absolute and total lack of due diligence that is becoming the norm on Wall Street. According to the Trib article a researcher at Income Securities did a general BK search on the net and the article popped up, he/she then passed it along to Bloomberg and the race was on. Also according to the Trib it had obvious references including the date the article was published (2002) in the text. Just as obvious is the fact no one read it beyond the head line before passing it along.

With this kind of due diligence the mortgage melt down is not surprising at all. Granted our current IT-centric world allows this; HOWEVER, it also allows for instant due diligence. Not proper or in-depth due diligence but verification at the very least. Oh yes, the big TV looking thing also allows a researcher to READ what they are passing on. Just a thought, I’m no expert on finance. chip

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