United Stock Plummets in Wake of Passenger Abuse Video
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United Stock Plummets in Wake of Passenger Abuse Video

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A United Airlines jet (Getty)

Controversy over how United Airlines removed a passenger from an overbooked flight has sent the company’s stock on a roller coaster ride so far this week.

On Monday, the stock price actually went up 0.9 percent, adding nearly $200 million to the company’s market cap. In fact, some pundits said on Monday that the airline’s stock wouldn’t be affected by the release of the video, which showed a passenger being forcibly dragged off a jet, and which set of a maelstrom on social media.

But all of that changed as of Tuesday morning, when shares of United fell as much as 6.3 percent in pre-market trading.

Share prices had rebounded slightly by mid-afternoon, to down 3.1 percent. If the price stays in that range, at closing bell United’s market cap will be down by $682 million.

Market cap is short for market capitalization, which is the value of a company that’s traded on the stock market – it’s calculated by multiplying the total number of shares by the current share price.

The carrier is on pace to be down around 2.8 percent for the week. That will reduce the airline’s market value by upwards of $600 million since close of business Friday, according to MarketWatch.

The drop in United Airlines stock follows release of the viral video, which shows a passenger being forcibly removed from a flight that had been overbooked. On Monday, United Airlines CEO Oscar Munez apologized for the incident, while separately saying he stands behind airline staff.

After the video went viral on Monday, Munez called it an upsetting event.  “I apologize for having to re-accommodate these customers,” Munoz said in a statement. “Our team is moving with a sense of urgency to work with the authorities and conduct our own detailed review of what happened. We are also reaching out to this passenger to talk directly to him and further address and resolve this situation.”

But then later, he sent an email to staff, in which he sided with them in the incident. In the leaked message to staff, according to CNBC he told them he “emphatically” stands behind them and commended them for going “above and beyond.”

But what does this mean for United stock prices, long-term? Financial analysts say investors still love airlines, although they are volatile.

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7 Comments

Anonymous

ASIAN AIRLINES, A NEW OWNER/CEO AND WE ALL KNOW WHO THAT IS!

JOHN MAYOR

UNITED!… WE STAND!
.
I’m at a loss for words here!… this is all so S-U-R-R-E-A-L! It hints at RACISM!… AND!… it’s I-N-S-A-N-E! But one question that kept coming back to me afterupon viewing, and listening to the MANY ACCOUNTS of this story, is!… “Could it be, that sundry “SECURITY GURUS” within the Airline Industry (not just United!) believe that ‘overbooking passengers’ on a flight, is– somehow!– a ‘SURE SECURITY MEASURE’ for for the Airline Industry?… and!… a ‘FAILSAFEGUARD’ for the majority of passengers?” And!… I continued to muse to myself:… “On what grounds, would the Airline Industry believe that this ‘FEATURE’ should be viewed as some sort of ‘FAILSAFEGUARD’?… because the Industry (let alone United!) could– then!– have an ASSURED MEANS to spring into action, AND ‘T-A-K-E O-U-T’ some passenger who might give the S-L-I-G-H-T-E-S-T H-I-N-T that same is a ‘TERRORIST THREAT’?” Could it be… I further mused!… that this FEATURE is the S-E-C-U-R-I-T-Y G-A-M-E-P-L-A-N that will keep the skys S-A-F-E! But!… and unfortunately!… and unfortunately for this POOR SOUL!… is a FEATURE that will keep a doctor from his appointed H-E-A-L-I-N-G R-O-U-N-D-S!
.
To sum up!… there will be legal actions!… of that, I have no doubt! And NUMEROUS ADVOCATES– N-O D-O-U-B-T!– are at the ready, to address this issue! But!… and nevertheless!… it’s the invoking of the D-E-F-I-N-I-T-I-V-E LEGAL ACTIONS, that I’m concerned about!… the actions that will get to the H-E-A-R-T O-F T-H-E M-A-T-T-E-R!… and, especially, the C-O-N-S-T-I-T-U-I-O-N-A-L H-E-A-R-T O-F T-H-E M-A-T-T-E-R!
.
We A-L-L!… I-M S-U-R-E (i.e., those with some CONSCIENCE!)!… have desired some S-T-R-O-N-G R-E-S-P-O-N-S-E-S to what has happened on 911!… and, to what is still happening around the world, today! However!… our H-U-M-A-N-E B-A-L-A-N-CE must not be put aside, in our attempt to prevent E-V-I-L-S from occurring! We must N-O-T lose sight of our DEMOCRACY!…YEA, OUR L-O-V-E FOR ONE ANOTHER!… in our R-E-A-S-O-N-E-D A-P-P-R-O-A-C-H to the SAFEGUARDING of one another! What has happened here, though, is C-R-A-Z-Y!… and, “certain” have C-R-O-S-S-E-D T-H-E L-I-N-E!… from that of R-A-T-I-O-N-A-L C-A-U-T-I-O-N, and into to that of I-R-R-A-T-I-O-N-A-L P-A-N-I-C, and I-N-H-U-M-A-N-I-T-Y! We NEED some answers!… A-N-D R-E-D-R-E-S-S!… to this issue!
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Please!… no emails!

Alan Falleur

Sounds like a troll just spamming some copypasta. I would ignore it.

Anonymous

John, the Meth Addiction hotline number is (888) 537-4948. Please call now. Note, it wasn’t necessary to use capital letters to get my point across. Just saying….

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