Delta Airlines stock fell hard on Friday because of incomplete research and poor judgment in reporting.
A group called GovernanceMetrics International, added Delta airlines to its financial distress watch list on Friday. The market reacted to this news by reversing the gains of the day. So, by the end of the day Delta had gone from up 2 percent to down 2 percent. Upon further inspection, GovernanceMetrics placed Delta on their financial distress watch list due to an amended filing for Delta’s Q4 2010 10K. When I looked at the amended filing on the SEC’s website, I found the filing had placed all the financial data of the 10K into XBRL formats. This is a type of computer language similar to HTML which makes it easier for computers to search through the data. In short, this amended filing was simply placing the data into a commonly accepted searchable database. There were no changes to the actual financial performance. In fact, Delta’s financial condition is improving quarter by quarter. Despite the placement of Delta Airlines onto GovernanceMetrics’ watch list, Delta is not in any trouble.
I find it very sad that a firm, such as GovernanceMetrics, would publish information without thoroughly checking the data. The consequences of this loose and irresponsible behavior hurt many people. Especially those who trusted the facts were checked for accuracy. In this case, they clearly weren’t.
At $10 a share… I’m a buyer.
Disclosure – I am a long-term DAL stock owner.
All the best and keep checking your data!
Jeff McAllister
OptionsANIMAL Instructor
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