In Brief: A United Airlines Theory

We talked yesterday about how, if you owned United Continental Holdings stock, you lost a bit of money on Tuesday on the negative reaction to United's invocation of state violence against a passenger, but if you owned all the airlines, you made money, suggesting that the violence was good for the industry as a whole. One shouldn't take that too seriously -- the stock price moves were all small and noisy, and it seems unlikely to me that United's recent public-relations troubles will have much business effect one way or the other -- but if one did take it too seriously, one might consider it evidence for the theory that companies with diversified investors might act differently from companies whose investors own only their stocks.

In that vein, reader Ben Appen sent me an email that I think is the best analysis I have read of the United fiasco, so I will just reproduce it for you here: