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Google News Evaporates $1.14B 2

Submitted by cmd
cmd writes "The Wall Street Journal reports that Google News crawled an obscure reprint of an article from 2002 when United Airlines was on the brink of bankruptcy. United Airlines has since recovered but due to a missing dateline, Google News printed the story as today's news. The story was then picked up by other news aggregators and eventually headlined as a news flash on Bloomberg. This triggered automated trading programs to dump the stock, cratering the stock from $12 to $3 and evaporating 1.14 billion dollars (nearly United's total market cap today) in shareholder wealth. The stock recovered within the day to $10 and is now trading at $9.62, a market cap of $300M less than before Google ran the story."
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Google News Evaporates $1.14B More

Google News Evaporates $1.14B

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  • ...money doesn't just disappear, it has to go somewhere. If it really did just disappear, then it must not have been "real" money in the first place.

    • Re: (Score:1)

      by cmd (56100)

      You are confusing wealth (a concept) with money (a thing), a distinction made in the original story. Wealth is created and destroyed routinely and instantaneously every day.

      This is how to create and destroy wealth:

      1. Take $100 in money and buy two Beanie Babies with it.
      2. You now have $100 of wealth in the form of two Beanie Babies.
      3. Sell one of the Beanie Baby for $200.
      4. You now have $200 of wealth in the form of one Beanie Baby.
      5. Suddenly discover nobody will pay more than $10 for Beanie Babies anymore

One big pile is better than two little piles. -- Arlo Guthrie