How Google Caused a Panic on Wall Street
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Google News has some oddities. Sometimes, it does not recognize the country from which the connection to the Google site is made. It will start serving news from a foreign country. At other times, old news will be listed as a fresh story. When this happened recently, Wall Street reacted and one stock plummeted:
“The US Securities and Exchange Commission has opened a “preliminary inquiry” into how an outdated bankruptcy story sparked a $1 billion run on an airline’s stock value.
The article about how United Airlines filed for bankruptcy in 2002 was revived when it showed up on a newspaper site’s “most viewed” section on Monday.
From there it was picked up by Google News and later seen by alarmed stockholders. The stock plunged from around $12 to just $3 a share before trading was halted.”
link: Probe into how Google mix-up caused $1 billion run on United
As users of Google News know, listing errors do occur. This recent incident is ample evidence to hackers how they can move the market in a significant manner. Spam mailings could not move a market like this. However, a misplaced story on Google allegedly can roil market and have millions of dollars change hands. It is duly noted by hackers.
Catherine Forsythe
One Comment
Robin Majumdar
September 13th, 2008
at 9:36pm
Proof, yet again that the “know your source” adage is important but not as much as…. RTFM. That, and due diligence… this also proves how much investors (especially retail ones) are lemmings and have not understood the Berkshire Hathaway / Buffet investment approach and are setting swing trades based on information from 0.1 seconds ago without thinking… what is the aggregate information and status of this particular company ?
That being said, this is a scary testimonial to how volatile (and easily manipulated) the equity market truly is.