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- Title
Sell the rumour, buy the fact?
- Authors
Marshall, BEN R.; Visaltanachoti, Nuttawat; Cooper, GENevieve
- Abstract
We document a high-profile instance of mispricing that is puzzling given the gradual information diffusion hypothesis and the lack of obvious limits to arbitrage. An internet search in 2008 led to a story about United Airlines' 2002 bankruptcy being re-released as 'news'. This resulted in United Airlines losing 73 per cent of its value and caused a $4.2 billion decline in the value of airline stocks and United Airlines suppliers. The incorrect bankruptcy 'news' was quickly retracted, which led to a rebound in other airline and supplier firms, but the stock price of United Airlines was adversely affected for 4 days.
- Subjects
UNITED Airlines Inc.; INTERNET searching; AIRLINE industry; CORPORATE bankruptcy; INVESTORS; ARBITRAGE
- Publication
Accounting & Finance, 2014, Vol 54, Issue 1, p237
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/j.1467-629X.2012.00496.x