Originally Posted by
gfowler-ord-1k
Broken Guitar Has United Playing the Blues to the Tune of $180 Million ...According to the
Times of London, "...within four days of the song going online, the gathering thunderclouds of bad PR caused United Airlines' stock price to suffer a mid-flight stall, and it plunged by 10%, costing shareholders $180 million. Which, incidentally, would have bought Carroll more than 51,000 replacement guitars."
Can United's 180 million dollar loss be chalked up entirely to a song on YouTube? Probably not. Did the song have a very real and very negative effect on United's brand equity? Absolutely...
I would be incredibly surprised if the "gathering thunderclouds of bad PR" caused the 10% plunge. In fact, I just took some time to check this out... looking at the historical price of UAUA around the time that the video was released (7/6/09):
Code:
Date Close Intra-day Cummulative
7/6/2009 3.34 - -
7/7/2009 3.26 -2% -2%
7/8/2009 3.25 0% -3%
7/9/2009 3.18 -2% -5%
7/10/2009 3.26 3% -2%
7/13/2009 3.31 2% -1%
7/14/2009 3.27 -1% -2%
7/15/2009 3.47 6% 4%
7/16/2009 3.49 1% 4%
7/17/2009 3.39 -3% 1%
7/20/2009 3.51 4% 5%
7/21/2009 3.72 6% 11%
7/22/2009 3.36 -10% 1%
7/23/2009 3.44 2% 3%
7/24/2009 3.79 10% 13%
7/27/2009 3.72 -2% 11%
7/28/2009 3.96 6% 19%
7/29/2009 4.16 5% 25%
7/30/2009 4.13 -1% 24%
7/31/2009 4.12 0% 23%
It's possible the Times is referencing the 7/22 intra-day price change, however, if anything, this video was a boon for stockholders! I could easily put out an article for 7/24 saying that the stock price jumped $180MM due to the Tweets!
BTW, here's AMR:
Code:
Date Close Intra-day Cummulative
7/6/2009 4.15 - -
7/7/2009 4.07 -2% -2%
7/8/2009 4.05 0% -2%
7/9/2009 3.98 -2% -4%
7/10/2009 4.17 5% 0%
7/13/2009 4.28 3% 3%
7/14/2009 4.18 -2% 1%
7/15/2009 4.36 4% 5%
7/16/2009 4.3 -1% 4%
7/17/2009 4.34 1% 5%
7/20/2009 4.53 4% 9%
7/21/2009 4.31 -5% 4%
7/22/2009 4.25 -1% 2%
7/23/2009 4.29 1% 3%
7/24/2009 4.66 9% 12%
7/27/2009 4.62 -1% 11%
7/28/2009 4.84 5% 17%
7/29/2009 5.23 8% 26%
7/30/2009 5.25 0% 27%
7/31/2009 5.35 2% 29%
So... they trend together. I wonder if UA's bad PR caused the same drop for AMR!
