Resurrected: Zombie Headlines And How Old News Can Move Stocks

Just this once, fake news is off the hook. Today, old news is to blame.

SeaWorld Entertainment Inc SEAS dropped as much as 2.3 percent Tuesday as traders reacted to primarily old information about the Department of Justice’s ongoing “Blackfish” investigation.

New court documents revealed that the criminal prosecutor sought to delay testimony for SeaWorld’s concurrent civil case, which might otherwise negatively affect the criminal investigation.

Related Link: The SeaWorld Turnaround Story Remains Misunderstood

But the late-August update wasn’t the focus of mainstream media reports. Instead, the investigation, itself, was deceptively emphasized, leading investors to perhaps overreact in their sales. SeaWorld had previously disclosed its subpoena in its June 23 8-K filing.

Investors aware of this context may have recognized the market’s overreaction and bought in to capitalize on the stock’s 3.4-percent rebound, seizing a quick 44.5 cents per share.

Those seeking to gauge disproportionate reactions and profit on proactive trades can look to timelines like BenzingaPro for stock history and news already factored into pricing.