Sell the rumour, buy the fact?. (21st August 2012)

• Record Type: Journal Article
• Authors: Marshall, Ben R.; Visaltanachoti, Nuttawat; Cooper, Genevieve
• Is Part Of: Accounting and finance. Volume 54:Number 1(2014:Mar.)
• Page Start: 237
• Page End: 249
• Publication Date: 2012-08-21
• Subjects: Accounting -- Periodicals; Finance -- Periodicals; 657.05
• DOI: 10.1111/j.1467-629X.2012.00496.x
• Languages: English
• ISSNs: 0810-5391

Abstract

<abstract abstract-type="main" xml:lang="en"> <title>Abstract</title> <p>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.</p> </abstract>