Blog Post Causes Apple Stock to Plummet
Today, uberblog Engadget posted a story regarding Apple delaying the iPhone and Leopard, which turned out to be a false alarm. However, during the period that Engadget claimed the delays as fact, Apple’s stock plummeted - well not plummeted, but it was definitely affected by the news - as CNet reports. I just find it extremely interesting that a “mere” blog can have such a powerful effect on the real world.
Update: My roommate Chris blogged about this as well.
I never held Engadget in very high esteem, and now it has sunk even lower.
This is really sad for both Engadget and Apple. Keeping people updated on the newest thing is hard. So I don’t really blame them for not checking their facts. Although I would blame them if I was apple. =P That’s world to you
Likewise, Andrew.
But this exercise reminds me of a quote from Uncle Ben of Spiderman fame — “With great power comes great responsibility.”
And a lot of large blogs, social media sites and so forth definitely have a large amount of power and influence. While it’s nice to see outdated oligopolies such as old media or the RIAA be forced to adapt or die, I also feel concerned about how the faces of web 2.0 wield their newly found power.
Sure, the NYT might not be the first to break every single story but their journalistic practices tend to vet out such rumors so they don’t even appear on the radar as they did for Engadget.
Call me cynical but I wouldn’t be surprised that in the next five years, we read about someone who committed suicide because they were incorrectly ousted as a pedophile or other social monster, courtesy of digg or reddit.
That is pretty amazing — how much impact a simple blog can have. If I were an investor, I wouldn’t be too happy with the whole thing, either.
Plummet might be the right word. It’s down almost to US$103 (from 107ish).
It’s unreal how often this happens - “news” blogs reporting rumors as fact, only to correct themselves a day, or even hours later. “Ooops, sorry. I guess we were wrong about that.” and apparently all is forgiven. Bullshit I say! Engadget should be forced to buy Apple stock to make up for every penny lost due to their false accusations.
@Matt: forcing Engadget to buy Apple stock doesn’t make any sense. What make sense to me is to trace who the original sender of the email. If it’s inside job then it’s punishable by SEC, if it’s a hack-job, it’s punishable by federal law AND the SEC. I just don’t like what’s going on where there’s little talk to really trace the real party behind this email shenanigan.
Meh, that’s life false alarms will happen, their stock will will bounce back up in no time.
PS. What’s up with the two numbers at the bottom of every page? Number of queries / time it took to deliver?
The reason why this caused many to lose money is because they had stop sell orders in place. Once the stock hits a certain price it became a market order. This happened to me and I lost 2k in the matter of minutes. Good thing I bought back in at $106.50 and the stock is sitting at $109ish at the moment due to the FCC approval of the iphone today. Booya!
I recommend everyone to pick up AAPL before the iPhone. This stock is going to $160 no problem.
It’s about trying to beat the next big blog out there to the story today (The typical we posted it first on “our blog”). Happens all the time on TV news cast and now on the web. However, this does not excuse them for “not checking the facts!” I’m shocked that anything posted on Engadget would have such an ill effect.
Just my 2cents…
If people wonder if blogs can be counted as journlism this stoery is one example to examine. Sure their article reported some “news” and it had a dramatic affect. But really they just posted a rumor that should have been confirmed from another source if possible. They should have realized it would affect the Apple market price.
@eric: Although I agree with your bullish sentiment, I see a dangerous overhype that surrounds the stock. Imagine a 4 months delay (albeit false news) for a product makes the stock loss US$5 (around 4bln market cap) in no time. It’s very frightening…
Come on, investors should have checked the facts…. Do you always believe everything you ever hear from any source and then act on it without any sort of analyses or even basic logical thought let alone validating sources?
There will always be rumours about pretty much everything, so people should learn to distinguish the facts.
Question: were the traders selling to get out quickly made up mainly of day traders and the like or more institutional investors?
Heh. This shows just how much power the ring of popular blog + rumor sites have.
And on the other side, think about it. When ThinkSecret or MacRumors announces a possible rumor that sounds really good, Apple’s stock soars.
It’s been announced that this person was a former employee!
I wouldn’t worry - the stock has risen more than enough over the years based on false rumours!!
Apple feed off the rumour mill, they take the long view and this wont have effected them in the slightest.
As for people that ‘play’ the market - well they tend (or should) do their research themselves!