United Airlines lost $1.1 billion in value but got some of it back

Please buckle up, there's some turbulence ahead.

United Continental stock had a bumpy ride on Tuesday, at one point losing about US$800 million (S$1.1 billion) in total value the day after a video of a man being dragged off a flight became a major news story.

Graphic content warning: Some viewers may find the following video footages disturbing.

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Shares in the company had declined about 3.8 per cent in mid-morning trading, a steep drop for a major company like United. By late afternoon, United shares had recovered to be down about 1.5 per cent, putting its hit closer to US$100 million.

The controversy began on Monday morning when video emerged of a man being violently dragged off a United Airlines flight. The man, who had been seated on the plane, was then asked to leave because the flight had been overbooked. When he refused, a Chicago police officer grabbed him.

Read also: United passenger was 'immature', former Continental CEO says

Since then, United has been dealing with severe backlash.

By comparison, Pepsi, another company caught in a public fiasco (its tone-deaf commercial featuring protests and Kendall Jenner), hasn't seen much change at all.

The chart below shows United's market capitalisation over the last five days. Market cap is a generally accepted way to value companies based on stock price.

The decline highlights just how serious a situation United faces. Airplane travel rarely tops the list of quality consumer experiences, but Monday's video appears to have set off a serious discussion around United, the airline industry, and police procedure.

Tuesday's stock decline is surprising in part because it did not seem like investors were particularly worried on Monday as the controversy started.

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