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."
This discussion was created for logged-in users only, but now has been archived.
No new comments can be posted.
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
Well... (Score:2)
Re: (Score:1)
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