One old newpaper story - $1.3B in value nearly destroyed

The Tribune Company accidentally re-published an article from 2002 on the Florida Sun Sentinel today about United Airlines' prior bankruptcy filing, making it appear as if the airline was ready to fail again. The story was posted on the papers homepage, and the date appeared to be today. The stock quickly went into a tail spin, becoming nearly worthless in moments. The stock fell as low as a penny by some accounts before the stock was halted on pending news.

The news was cleared up and the false rumor was denied by United, but created one of the more interesting stock charts anyone has recently seen. Over 50M shares have changed hands as of 3:30 PM today, nearly half the number outstanding.


I'm absolutely certain some people made a boat load today while others were destroyed. Let's just assume that 10M shares changed hands during the downward spike, at an average of 50% below the current value of about 11 per share. That would mean that over $100M of wealth was transferred around in just a few moments, leaving from those who panicked or believed the story to those who were buying at the discounted value. Even today, this should illustrate the awesome power that a single newspaper article can have upon our society. It should also illustrate the responsibility that such an institution such as a newspaper needs to understand, even in a time when its apparent power is being diminished.

Questions remain to my eyes. What will happen to those who erred in this situation? Will there be legal fallout to the Tribune company or the analysts that picked up this story? Will this further erode newspaper credibility, or does it indicate how strong that credibility can be? Does this change how people look at the newspaper "corrections" policy or newspaper archives?

UPDATE:

Forbes published a great play by play of the action. It raises, but does not answer, the questions about who is going to get sued over this error.