Mistaken Bankruptcy Report Tanks UAL Stock

Airline Says Florida Newspaper Posted Six-Year-Old Article

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CHICAGO (AdAge.com) -- UAL Corp.'s stock bottomed out this morning after a 6-year-old news report about the company's Chapter 11 bankruptcy filing resurfaced on a newspaper website.

Shares of the Chicago-based carrier plunged to 1cent from Friday's close of $12.30, before trading was halted at about 10 a.m. The stock resumed trading on Nasdaq at 11:30 a.m., and by midday it was trading around $11.38, down 7% on the day.

Whole industry takes a hit
Fallout from the mistaken report spread to the industry as a whole, pushing down airline stocks 20% at one point Monday morning, though at midday the sector recovered, too.

UAL in a statement said the South Florida Sun-Sentinel was responsible for its stock tanking after the paper posted as current news a 6-year-old news story written by sibline publication the Chicago Tribune. UAL filed for bankruptcy protection in December 2002, emerging in February 2006.

Tribune Co., parent of the South Florida Sun-Sentinel, said it was "looking into the situation," according to a company statement.

Trading halted
Nasdaq halted trading of UAL shares at 10:07 a.m. Central time after the company notified the exchange that it planned to release material information to the public, a Nasdaq spokesman said.

All UAL trades executed between 9:55 a.m. and 10:08 a.m. Central time will stand, Nasdaq has ruled. "This decision cannot be appealed," the exchange said on its website.

The mishap came hours after Ray Neidl, an analyst at Calyon Securities in New York, published a research note this morning saying the big U.S. airlines appeared to have dodged the threat of bankruptcy this year after the recent drop in oil prices.

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Lorene Yue is online reporter for Crain's Chicago Business. Crain's senior reporters Ann Saphir and John Pletz contributed to this report.
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