What a day for Apple investors. The stock started off strong today on a lot of pre-market buying, despite news that Amazon will finally start competing on sales of DRM-free music.
Then, whoops, at 11:49 AM EST Engadget posted saying that the iPhone and Leopard operating system launches would be seriously delayed. They based the story on an internal Apple email that was forwarded to them. The original post:
This one doesn’t bode well for Mac fans and the iPhone-hopeful: we have it on authority that as of today, the iPhone launch is being pushed back from June to… October (!), and Leopard is again seeing a delay, this time being pushed all the way back to January. Of 2008. The latest WWDC Leopard beta will still be handed out, but it looks like Apple-quality takes time, and we’re sure Jobs would remind everyone that it’s not always about “writing a check”, but just how much time are these two products really going to take?
Apple’s stock promptly tanked on massive selling, going from $107.89 to $103.42 in six minutes (11:56 - 12:02). This wiped just over $4 billion off of Apple’s market capitalization. A lot of people lost a lot of money very quickly.
Well, it turns out that the email was a hoax. In an update, Engadget said that the email was in fact sent from Apple’s internal email system, but that it was not accurate. Apple quickly notified Engadget of the error, saying “This communication is fake and did not come from Apple. Apple is on track to ship iPhone in late June and Mac OS X Leopard in October.”
By 12:22 Apple stock had mostly recovered and it ended the day down just $1.40/share, or $1.25 billion in market cap.
Let the lawsuits and criminal investigations commence (although to be clear, I do not believe Engadget will have any liability here. Apple may, if the email did originate from its servers).
Dude… A blog is but a blog. Nothing more.
Heck, if this was truly a response to Engadget’s post, they should be happy, and rather more careful in the future, about the reputation they’ve established and how to maintain it.
Apart from that, Brent has said it all above. I too would love to be able to nominate this for a Darwin Award.
“A prudent investor 1.) doesn’t make sound investment advice based solely on the missives of a gadget blog and 2.) checks confirms the press release *himself* before placing an order.
An unwise investor who buys or sells exclusively based on “news” from Engadget.com gets what they deserve.”
I’m with Brent, too. I’m amazed how one blog post could have such an impact on a stock.
Curt and Diego - don’t confuse blogging with journalism. They can be the same, but the vast majority are not. Nor should they be. Blogs can post whatever they want without checking anything. As a media consumer, and as an investor, you need to know the difference.
if you like apple check out AZTM they are an up and coming tech. They own http://www.searchjerk.com which got over 9 million pagewviews last month and is quickly becoming one of the top search engines on the market
What Curt said, but Engadget nor Apple should be liable. I’m glad that it happened and I hope it happens again to all them idiot crooks at the stock market reacting on rumors alone as they always do instead of triple checking their rumors with official sources instead of scheaming an effing blog and dumping stocks like the end of the world is here. Noobs!
Hello all, please replace ’scheaming’ with ‘Skimming’. Thank you!
I agree with JJ and Alex. The real loser will now be Engadget.
With Apple I’ve been long since shortly before Jobs came on board. So, I’m enjoying the ride, not even bothering to see the latest quote.
I think this is a big sign of what happens when a large number of investors in a company are “fanboys.” Apple’s halo effect extended into people investing in a company they follow because it’s doing well — nothing wrong with that. But when the investors are the same people that devour every trinket of information that comes across a blog, you see something like this.
This is something that only could have happened to APPL. This couldn’t have happened to less “publically followed” but equally valued stocks, such as a semiconductor company or somesuch.
Market makers and active traders will hit the stock regardless of the news story; any synchronized concerted action makes money; that’s why it’s illegal for traders to create such synchronisation signals. Those who plant stories like this during market hours, whether they profit from it or not, allow stock to be stolen from innocent investors by needlessly triggering their prudent stop-loss orders. Anyone actively trading at that moment can simply pick up the free money, stealing a couple of bucks for each share needlessy sold.
It was not active day traders, spooked by a silly story that lost money here, it was investors with prudent stop-loss orders in place who had money taken from them by the day traders, for whom the story was simply a starting gun.
Even if those planting or publishing the story are “innocent”, what they did was morally no better than knocking down someone emerging from the bank and laughing while bystanders help themselves to the cash they have dropped.
Why is two sources necessary for a journalist to take action, but two sources not necessary for the person selling stocks to take action.
Why aren’t the people selling stocks without doing proper research not to blame? Why isn’t it their fault for sumbitting to panic. If they’re so heavily invested with Apple as to take a hit if the news is true, why don’t the investors phone Apple and confirm the story before selling all their stock.
It’s a friggen blog post, it’s the investors fault, not the blogsite.
There is a somewhat amusing back and forth about this on Mr. Nick Denton’s valleywag, between Denton, his employees and Mr. Jason Calacanis.
yeah - Someone was shorting this stock for sure …
- *probe into endgadget
Allen — anyone who stops out of their shares on a limit is not an investor, and in my book that makes them a daytrader/gambler. I’m not knocking it, I’ve done some of it myself. But those are the risks you take as a daytrader. Investors — the core of people holding AAPL — lost nothing yesterday.
I think this also illustrates how little knowledge of the tech industry and its goings on the stock market/traders have. I think it could be fun (also probably illegal) to make up a fake component in MacBooks or something (TEO controller) and post a “story” saying Apple’s supplier of Macbook TEO controllers just had their principal factory burn down…. then watch the tech bloggers immediately jump on the fact that its fake but Apple’s stock drop anyway.
Don’t actually do that, I own shares.
2 notes:
Who bases selling stock on a “gadget blog”
&
I sale short ICQ
What a nightmare? Bloggers are getting their due.
I can’t believe they would post something like that without verifying the story. Another shining example of shoddy blog “journalism”.
Engadget is totally at fault here as they did not fact check before posting such a story. They are not a rumor sight so yes some investors will take their blog seriously. I unfortunately lost allot due to this false information, as a large holder of AAPL options my options took a 20%+ decline and are still below the pre rumor value… I hope the SEC does a full investigation into any insider trading that benefited due to the rumor…
An excellent marketing/press opportunity missed by Truemors……
Seems to me the stock sellers get what they deserve! The morons should not sell millions of dollars of stock based on an unoffical, unconfirmed email posted on a geek web site. Or even CNN for that matter. They should wait for OFFICIAL Announcement from APPLE or any company for that matter.
I am not shedding a tear for them!
This is a very telling story of the state of the blogosphere:
1. Skewed demographics toward Apple enthusiasts.
2. The goals of a blog is speed, not accuracy. That’s because speed of information is more important because it’s tied to traffic which in turn is tied to revenue.
3. The public doesn’t distinguish the difference between a story in Engadget and one in the NYTimes.
More here: http://www.sparkminute.com/?p=156
Anyone that thinks that this isn’t going to get serious attention from the SEC, Apple, Engadget, AOL and Time Warner is seriously mistaken. The best outcome for everyone is if this is simple a fanboy looking to get some attention by publishing a fake story. More likely, someone thought they could make a few bucks by taking advantage of Engadget’s weak editorial standards and ‘quick to publish’ facts to make a quick buck. People who don’t understand that more than $4B in REAL money changed hands as a result of this SCAM do not understand the capital markets. These markets are very regulated and are based on a system of trust and accurately reported facts and data. Any attempt to benefit from this activity is against the law.
I promise you that Ryan and Peter are not having a good day / week.
What’s with the drivecleaner popups when reading techcrunch via the full feed?
I’ve experienced this 3 times on different machines in work and at home, on a mac on a PC it aint spyware. Are TC forcing popup ads for RSS readers?
The price is now $108.77. For those who stuck it out, it rebounded quite nicely.
Good job on keeping up-to date with what happened to Apple’s stock value. The six minutes in which the stock dropped by four dollars must have really caused a lot of people to panic. We wonder if this incident will affect the development time of the said products.
We wrote an article on this which can be found here: http://www.qj.net/Engadget-rum...../aid/92758
Even though Engadget wasn’t even close on this bit of “news”…it is still impressive to see how many people apparently follow the site.
Nothing is going to happen to Engadget so just get it out of your little brains. This anonymous tipster will be found, and will have his ass handed to him/her.
Hi, someone is copying TechCrunch’s blog posts and putting them on their blog. Most of it is paraphrased, but there is one sentence that is copied exactly: “They based the story on an internal Apple email that was forwarded to them”.
See the following link:
http://www.johnchow.com/feel-t.....-the-blog/
Wow!
I too think Endgadget would be liable if it was anyone of the two. Apple here is more of a victim, but you never know these days with all these new laws being introduced all the time.
I wonder if this wasn’t a plan by a short seller? Or a creative day trader?
If it was, someone is probably laughing all the way to the bank!
On one hand I don’t see how they could hold endgadget responsible because they’re just passing info on. On the other hand though, they should have checked the source.
Don
Endgadget has been playing with the public for a while now, first with a ‘fake’ iphone news and now this. They should grow up and take on the responsibility of internet reporting. Also they don’t credit their sources properly, all their links point back to their own tag pages, including links to trade names etc.
The wisdom of crowds rules yet again. Wait I’ve been to wikipedia lately what wisdom?
So basically you’re saying I could go short (sell stock I don’t have) on a stock position, send a fake email from a website like http://fakesend.com and rake in the big bucks?
I wouldn’t do that though, just hypothetically speaking.
Endgadget.com . This wiped just over $4 billion off of Apple’s market capitalization. A lot of people lost a lot of money very quickly. The fans power is more unimaginable….