Can we please do something about the reporting of US Airways’s stock price? The NYT says today that "the airline’s share price shot up 13 percent Friday", and even the Economist is blogging the same thing. The clear implication is that the plane crash on Thurday afternoon did wonders for US Airways shareholders.
But it didn’t. Here’s the stock chart; the blue line is US Airways, while the red line is a broad index of airline stocks. And the key thing to remember is that markets were still open when the plane crashed on Thursday.
Essentially, there was a panicked sell-off Thursday afternoon, immediately following the plane crash; the stock recovered most of those losses when the markets reopened on Friday morning, and ended Friday’s session modestly above its pre-crash levels. But so did all the other airlines: US Airways did not outperform the index between the news of the crash and the markets closing on Friday.
Now that in and of itself can be considered quite an achievement: one might reasonably expect a plane crash to damage the share price of the airline in question, especially if the airline is as financially troubled as US Airways. But if you’re going to compare Friday’s closing price to some other price, then Thursday’s closing price is a weird one to choose: comparing it the pre-crash share price is much more meaningful.