AppleGate

May 17th, 2007 at 4:43 pm

Not just you would’ve reported it, most mainstream would’ve if they saw it too. It was only this week that they were quoting whitehouse.org instead of .gov on Jerry Falwell’s death.

I think they (and you) have no need to defend your professionalism, just maintain it. April Fool’s jokes aside I’d thing you guys could put your reporting up against most any mainstream outlet and come out great, which is why people read you.

May 17th, 2007 at 4:45 pm

Clarifying — my confusing misuse of two different ‘they’ above — I think most decent bloggers take their reporting every bit as seriously as the mainstream.

May 17th, 2007 at 4:47 pm

I think Engadget did the right thing by reporting this news…that’s what they do report breaking news about technology…that’s what makes visiting their website exciting…I think

May 17th, 2007 at 5:13 pm

engadget possibly enabled some bad actors to make in $$s from innocent people more than engadget has made in revenue over their entire history! And they just basically say that if the same thing happens again, they’d make the same mistake again? wtf?

If engadget has no connections inside apple that could have privately confirmed or denied the story then why, exactly, are they so widely read .. and do they deserve to be?

Perhaps real journalists would NOT have been so easily tricked. Perhaps this IS a problem with blogs operating without any real accountability or standards, just operating, digg style, for maximum page views.

May 17th, 2007 at 5:25 pm

I think we’ve just witnessed a dangerous evolution of phishing attacks.

Email headers are easy to forge. Find the right distribution list, craft the right message and wait for it to filter to news outlets.

Tier 1 blogs are just like regular news outlets, just far more responsive.

May 17th, 2007 at 5:28 pm

The speed at which fiction spreads, particularly when people relish the misfortune of others, is much greater than the speed at which clear thinking occurs in the brains of news writers. It’s more fun to have a juicy story than to spoil it by digging (not the website) for the truth. The writer has some responsibility to validate the story. I suppose if it seems very important then they should at least run it with a bushel of disclaimers. Why write the truth when lies are easier to make up?

May 17th, 2007 at 5:45 pm

Michael - you know little about the stock market. Only those people that sold on the noise lost money. Those people that were looking at the price every evening like 99 percent of people do, saw nothing and lost nothing.

This crap happens hundreds of times a day. Only because it is apple and it is engadget do you think it is now important.

Feeding stories to cnbc, wallsstreet jornal and other media from stock promoters has happened forever. Watch wall street the movie.

May 17th, 2007 at 5:48 pm

Let’s start by saying that Mike supports Ryan so that Ryan will support Mike when Mike posts things like this. Same thing with Truemors, everyone has said its crap yet Mike gave a flat review with no pro/con cuz Guy is a big name.

The Apple email may have been solid gold but when something is too unbelievable, it is too unbelievable. Stand up and say you f’ed up. Happens to all of us. Instead of excuses. Ryan seems to be truthful in his accounts but the email should have started with, I f’ed up. But again, no one remembers who came in 2nd in the olympics.

Email comes in, the phone should be ringing to the person who is named on the email. Receive confirmation then post.

Roger #11 you are right, the writer does have a responsibility to validate the story.

Yet read the comments on engadget. No one cares that Ryan did something wrong. The internet does not have a memory. It’s like that over and over. Same thing here as well. I don’t get it frankly. Remember Digg from last week? Surely blogs like this one said it was the end for Digg yet this week it’s bigger than ever.

Will the SEC investigate? Who knows. Stockphising sounds like an interesting term.

May 17th, 2007 at 6:27 pm

Any investor who trusts rumor sites like engadget get what they deserve.

May 17th, 2007 at 6:41 pm

Bobby,

The sale / price manipulation was already pre-planned.. all they needed was an alibi if and when SEC investigates.

Engadget was just a helpless and unlucky bystander.

“The thing about money, is it makes us do things we don’t want to do.”

May 17th, 2007 at 6:46 pm

Rumors used to get started on the trading floor before it all went electronic trigger happy so who is really to blame here - electronic sell/buy triggers that only operate as if price fluctuations are the only basis to make a judgment call on sell or buy? Who is to blame if you trade on the memo OR if your systems are triggered to sell when Apple gets to 101.00 regardless of the reason - maybe some systems need to be smarter?

As for the source of the memo - I’m not blaming Engadget but the IP address can be spoofed so it’s not that Apple’s servers were hacked so before we blame Apple for allowing it be “hacked,” let’s not presume it was hacked as clearly there are other ways to make it look like it came from Apple … then the bigger question is who had short positions on Apple and do we feel comfortable in thinking it wasn’t from them? Since shortsellers of Apple stock have pretty eaten it in the shorts for 3 years, maybe they needed a day to get something back?

Yea, I’m not really inclined to blame Engadget, they got an email the researched seem to indicate it’s from Apple - Apple probably wouldn’t respond if you asked if Steve Jobs was hit by an AMD sign so it seems normal. If you are the Kremlin, you have to take the good with the bad.

And as others point out, if you invest by Engadget or by lock stepping into price points, you might want to revise your strategy.

May 17th, 2007 at 6:58 pm

Exactly:

“I’m not sure we (bloggers) understood quite how much influence we really had until yesterday. “AppleGate” will become an important historical footnote for the development of blogs and the evolution of the news and editorial business more generally”

This is what I meant with “a big day for blogs” in my previous comment. Hope Engadget won’t get hurt by this, though.

May 17th, 2007 at 7:01 pm

Sounds like Apple was flushing out a canary. Send out a few dozen slightly different company-wide emails and see which version hits the wires. Do it a few times and you get quadratic convergence on the internal leaker.

May 17th, 2007 at 7:21 pm

I think Trevo is absolutely correct. This didn’t really affect many stockholders.

Firstly saying $4billion wiped off is meaningless, it has to be expressed as a percentage of the market cap.
Second how much volume was actually traded during that time? Investors would only have taken a hit selling during that 20 mins. There would not have been many trades executed as the stock plunged. Looking at the severity of the fall, it looks like aggressive traders took short positions instantly on seeing the news then had to scramble to cover their short by buying back, if so then hardly any retail investors would have been affected.

The average non-pro investor would only have read about this at the end of the day.

May 17th, 2007 at 7:23 pm

I agree. If I were a trader, I’d be pretty upset myself…

http://www.capitalai.com/blog/.....ess-ideas/

May 17th, 2007 at 7:35 pm

Thanks for the intelligent insight into the pressosphere. I, for one, wouldn’t consider an internal memo nearly as “solid gold” in comparison to a PR. A PR is an absolute official statement, where as an internal memo is not considered public consumption, from the company’s stand point.

May 17th, 2007 at 8:06 pm

It wasn’t only on Engadget: I also found it on yahoo biz at http://biz.yahoo.com/bw/070516......html?.v=1
didier

May 17th, 2007 at 9:16 pm

I dont think the whole “4 billion cap lost” is very significant. Nobody lost a lot of money on this at all, all stocks go up and down.

May 17th, 2007 at 9:27 pm

> Ryan says “For a reporter, this kind of thing — an internal memo to a company’s employees — is solid gold” and I agree

Right. In professional journalism, secondary or alternate sources are often used to back up what one source says. Ryan calls himself a reporter and that, in the loosest sense, is exactly what he was - he heard and repeated. It’s gossip, not news, and anyone willing to buy and sell stock in gossip tends to end up looking silly.

May 17th, 2007 at 10:05 pm

What an interesting post. I hadn’t looked at it this way but it’s true. Very cool.

I agree that Apple’s slow response caused the problem. Poor engadget!

May 17th, 2007 at 10:41 pm

Yet another crazy story for the Apple history books…

I agree Engadget wasn’t in the wrong, they may of had an itchy trigger finger but can you blame them on a story like this?

May 17th, 2007 at 11:26 pm

No matter you are a short-term trader or invest for the long-term it is normally considered wise to insert stop-loss rules in your system. So many funds (which are usually protected by common-sense rules) was probably hit. Less so private traders.

Engadget (and apparantly this site would have done the same) showed their lack of business knowledge and inexperience. This kind of information would *never* be sent just to internal mailing lists to all emplyees - it is *required* (by SEC) to immediately be made public.

So the fact that there was no press-release told anyone the “leaked” email was something else. Engadget might have reported on it if they felt the itch but should have warned readers that it (with very high probability) was false information.

May 18th, 2007 at 12:34 am

They have to delay a lot of products, lately. I was also passionately waiting for OSX. Well, we will just have to wait, but hopefully not too long. Because then I might look elsewhere.

May 18th, 2007 at 12:46 am

Well, engadget should check it’s sources, don’t you think ? I’d rather call it engadgetgate….

May 18th, 2007 at 1:36 am

This post is 100% on the nail. Any journalist in Ryan’s situation would have done exactly what he did - especially given Apple PR’s reknowned lack of care in dealing with anyone other than the WSJ or NYT. Interesting post here:

http://www.theinquirer.net/def.....icle=39688

On how Apple effectively brought this on themselves.

I for one trust Engadget more after this incident, not less. The transparency in editorial decision making etc - all good stuff.

May 18th, 2007 at 4:20 am

If Apple were in fact targetted and Engadget were suckered into taking part in a calculated sting I’d expect the professional industry bloggers to be more worried about the potential fallout from this than Apple .

May 18th, 2007 at 6:57 am

Apple Gate –

- Please someone explain the “Gate” in all the names … waterGate etc…

May 18th, 2007 at 7:18 am

@pallet jack,

The infamous Watergate reference originated from the Watergate Hotel, where the break-in by Nixon people occurred.

http://en.wikipedia.org/wiki/Watergate

Tony

May 18th, 2007 at 7:21 am

It was irresponsible of Engadget. Ryan’s explanation doesn’t make sense. He mentioned that even after he found out, less than two hours later, that the email was bogus he didn’t edit his post. Why?

Some people mentioned that not much was lost. I’m long on Apple so it didn’t matter much to me. But, did you see the exchange volume? That’s a huge exchange of money there.

May 18th, 2007 at 8:55 am

i guess it’s true what they say - the most edumacated people are the most indoctrinated. sheeple. no critical analysis.

and endgadget’s excuse is hilarious - this was a ‘big’ and ‘urgent’ story, dontcha know?

those are the true determinants of whether a story should run or not on Endgadget.com, right? the bigger and more urgent, the faster they publish it. seems like a sure-fire way to guarantee themselves some face time with a judge.

i mean, what would the tech world have done if they actually had to wait, say, another hour or two, for news that the Apple iPhone would be delayed for several months. how would people manage to go on with their daily routines, really, without this critical piece of information? two hours is a _long_ time. in two hours, do you know how many of your friends you could tell that the iPhone was going to be delayed, and therefore you’d have to wait several more months until you could spend entire days doing nothing productive at all?

and the blame rests with Apple, of course. who do they think they are by not responding to a rumour within two hours, outside business hours? don’t they know that they have to respond to _every_ ridiculous rumour that _every_ ridiculous blog can conjure up - all within two hours - preferably much faster? where did Apple get its PR people, anyways? they’re horrible. purely incompetent. fire them all, i say.

the reason EndGadget published this rumor was because they could - they could do it, make heaps of money, and there would be very little if any outfall b/c their readers are uncritical - they just accept as gospel any nonsense they hear.

someone should lose their job over this - preferably the editor who decided to run with this rumor - which has not only destroyed the credibility of Endgadget and other tech blogs, but put a significant dent in the credibility of the blogosphere as a whole.

and please don’t compare the blogosphere to the mainstream media - yet. we’ve a long way to go before the internets are run by the publish-whatever-rumors-you-want-and-let-dead-civilians-and-soldiers-sort-it-out people.

the faster EndGadget goes under, the better off we’ll all be. it’s time for the free market to sort this out - any good libertarian would support such an outcome.

May 18th, 2007 at 12:05 pm

Agree witth #59 - Peter. I read TechCrunch for the topics and analysis - not how fast they break news. There are lots of ways to deliver valuable news.

May 18th, 2007 at 4:33 pm

“But the fact is that big blogs now have an incredible amount of power to move information quickly, and influence people more broadly than ever before”

And with power comes responsibility. If “old media” had of made this huge mistake all the self-righteous bloggers would have been all over them. But when the shoe is on the other foot you don’t lay in to people just as much.

So what if the source was reliable before? You don’t just get their side of things. Engadget should have waited to hear back from Apple. Plain and simple. If the original source was duped, and subsequently Engadget was duped, then Apple may have just cleared this up. If someone says, “Oh Mike Arrington this and that.” Am I just going to post what this someone said without hearing from you first? If I do then it’s irresponsible to not give you a right of reply. It’s that simple. I think that old media is laughing right now.

May 18th, 2007 at 8:26 pm

I am long AAPL and I did not know about the rumor until the market was closed. And, I am happy about that. I did see the stock get weak during the day and then recover, but I did nothing since I am long term. I don’t have any stop losses in place, since I know that high tech stocks are volatile and can hit it and then recover, and you would be sold out. Maybe, it is a lesson learned for the people that put too much trust in what they read on these internet sites and on the yahoo stock boards.

You only lost money that day, if you sold blindly. You are still the one controlling your buy and sell orders.