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Fake E-Mail Results in Angry Apple Shareholders

Posted by ScuttleMonkey on from the solid-gold-stock-tips-buy-buy-buy dept.

drhamad writes "Apple stock dropped 2.2% today in mid-afternoon trading as Engadget published news based on a faked e-mail inside Apple. 'Apparently an internal memo was sent to several Apple employees--and forwarded to Engadget--around 9am CT today saying that Apple issued a press release with the news that the iPhone was now scheduled for October, and Leopard was delayed until January. About an hour and a half after that e-mail went out, a second e-mail was sent--this time officially from Apple--saying the first e-mail was a fake, and that the delivery schedule for the iPhone and Leopard had not changed.'"

14 of 193 comments (clear)

  1. What I'm surprised about... by bluemonq · · Score: 5, Insightful

    ...is the fact that this hasn't happened more often.

    1. Re:What I'm surprised about... by Mia'cova · · Score: 4, Insightful

      No kidding. Plus, engadget and friends are going to have to be extra careful for a while. It seems like this would be an easy way to make some money shorting a stock. You'd have to pull it off but it's pretty hard not to predict some copy-cat attempts in the coming months.

    2. Re:What I'm surprised about... by iamacat · · Score: 4, Insightful

      In this case, the scams are self-correcting. The more false rumors are generated, the more users will wait for official press releases and dismiss anonymous "internal memo leaks". So this can not happen too often.

    3. Re:What I'm surprised about... by VertigoAce · · Score: 4, Insightful

      Engadget wasn't really tricked here. They reported on an email that actually was sent to Apple employees and was forwarded by a real Apple employee to engadget (and it sounds like this employee has been a reliable source in the past). That is about the best source you could have short of an official press release.

      The real story is that somebody managed to fool some number of Apple employees into believing the fake memo. It's hard to say much more without some more details (was the From: header spoofed, or was it just good enough to make it past a casual glance?). Why aren't official confidential memos signed by a closely guarded private key? That way employees would know unsigned memos are quite possibly fake.

  2. Downside to secrecy by DogDude · · Score: 3, Insightful

    Well, I guess that when you come to expect that a company's news comes primarily from intentional and unintentional leaks due to their own secrecy, it makes sense that people would buy this. Maybe it's time Apple re-thinks their super-secret policies.

    --
    I don't respond to AC's.
    1. Re:Downside to secrecy by vought · · Score: 4, Insightful

      Maybe it's time Apple re-thinks their super-secret policies.

      Maybe it's time the Apple rumor industry shut down. It's any company's decision to keep any and all information about upcoming products secret.

      The fact that Apple has given in to preannouncing some products lately (Leopard, AppleTV, iPhone) shows that they have given ground on their previously super-secret ways.

      When you're known as the industry's R&D house, it's likely worth a lot of money to keep new projects and features secret for as long as possible. Asking a company to tell you everything they're working on (or schedules) is nuts because it lets your competitors know where to aim - would you want your employer to do that?

    2. Re:Downside to secrecy by tlhIngan · · Score: 4, Insightful

      Well, I guess that when you come to expect that a company's news comes primarily from intentional and unintentional leaks due to their own secrecy, it makes sense that people would buy this. Maybe it's time Apple re-thinks their super-secret policies.


      Perhaps, or maybe it's Apple's way of finding out who's been breaking their NDA. Perhaps by first looking at trading activity, then by looking at the wording of the email that was posted on Engadget. After all, if you found this out, you'd want to either short stock or something first, then leak it out... Remember, Apple still has to deal with leaks, and something as wild as this may make it obvious since it'll hit the big sites (one of which is likely to post it verbatim, thus identifying the culprit). And people who react to silly things like "A well-connected Apple employee said..." or "Our insider Apple employee" do deserve to get burned if they make financial decisions based on an unverifiable source. The source could very well be real, but it could also be made up. Speculation on new products is one thing, but actually doing stuff based on news whose validity is as good as the neighbourhood bum...

      As for intentional leaks, that's hard to determine. But if you're going to do stuff like sell stock, you might want to wait for official confirmation. Because it's so easy to write "A VP of marketing at Apple has told me that the iPhone will support 3rd party applications, and there is going to be an SDK released June 1. Developer iPhones will be released then as well."
    3. Re:Downside to secrecy by jcr · · Score: 5, Insightful

      Maybe it's time Apple re-thinks their super-secret policies.

      Get serious.

      Shortly after I went to work there, a colleague explained to me exactly what that secrecy is worth in monetary terms. Apple got the iMac G4 on the cover of Time magazine. You can't buy Time's cover as an ad placement, but if you could it would probably be worth a tens of millions of dollars.

      -jcr

      --
      The only title of honor that a tyrant can grant is "Enemy of the State."
  3. What are the implications for the website? by Chairboy · · Score: 5, Insightful

    When something like this happens where a direct financial impact can be measured, do any of the rules change regarding the protections that the reporting website operate under?

    If the New York Times reports that Microsoft was filing bankruptcy and the stock plummeted, The NYT would be held to some sort of standard. Sometimes a retraction isn't enough, for instance, to protect from a lawsuit.

    Now when it's a website, do any of the protections exist, and what are the implications for these guys in terms of liability?

    1. Re:What are the implications for the website? by eln · · Score: 4, Insightful

      If they had a source, and a valid reason to believe that source was credible, I don't see how they can be punished for that. I would hope they had more of a reason to believe it was credible than that it came from an "apple.com" e-mail address.

      If you start punishing reporters for getting a story wrong based on a faulty source when a reasonable person would have accepted the source as credible, you will basically kill investigative journalism (as if it wasn't close enough to dead in this country as it is).

  4. Re:And when do options expire this month? :-) by smilindog2000 · · Score: 4, Insightful

    The SEC just needs to find who shorted the heck out of Apple stock yesterday.

    --
    Beer is proof that God loves us, and wants us to be happy.
  5. Re:Testing the waters? by evilgrug · · Score: 4, Insightful

    As one Engadget reader commented mere minutes after the initial story was posted:

    "This simply does not make any sense.

    Apple only pushed Leopard back a few weeks ago, and confirmed the iPhone shipping even more recently when they released their quarterly earnings.

    Is someone pulling your leg?"

    These are the kind of things that Engadget should have thought about before the story was posted without contacting Apple.

    And if they were running behind, as you hypothesize, why would they need to "test if they could push back the releases", either they're behind and they have to, or they're not behind and they don't have to. What do they do if they are running behind and do "scare the sheep"? That makes even less sense.

  6. The Real Culprit Here is Engadget by Jeremy_Bee · · Score: 4, Insightful

    Everyone is jumping all over Apple for their "secrecy" when it clearly has nothing to do with these kinds of episodes which happen at all kinds of companies, not just the clever secretive ones.

    Others are guessing about which Apple employee will get fired, when all reports indicate an outsider as the source, not a real Apple employee. As consumers of news therefore, it seems that the majority of us have failed to even discern the basic facts here.

    As producers of news, the kiddies at Engadget are the real culprits here and the creators of the whole mess by means of their thoughtless and incompetent "journalism."

    They are the ones that did not bother to simply phone up Apple and ask for a confirmation as any decent journalist would normally do. They are the ones that continued to run the false story on the main page even after they received a correction from Apple itself (they put that *after* the break for about an hour after they found out and did not change their headline). They are the ones that filled up their own comments area, calling the people protesting their move "jerks" and telling them to "shut up." They are the ones that deleted posts on their site that were too critical of their actions.

    The problem is simply one of a lack of journalistic standards and a blurring of the line between "I'm a rich kid who likes computers and has a website" and "I am an IT reporter." Incompetence and asshattery plain and simple.

  7. Re:And when do options expire this month? :-) by jmp_nyc · · Score: 4, Insightful

    The problem is that with Apple trading to all time highs at the beginning of the week, lots of people were shorting it, or buying puts.

    Not to mention that this Friday is the monthly expiration day for traded options. The big brokerages that underwrite most options have a vested interest in having the stock price go down by the time the market closes this Friday. There are options on about 4 million shares that expire worthless if the stock price is below 110, 3.4 million shares worth that expire worthless if the price is below 105, 5 million shares worth that are worthless if the stock is below 100, etc. The backers of those options would love nothing more than to see as many as possible expire worthless. They've been known to manipulate Apple's share price downward in the week leading into expiration. (Or at least Apple has managed to go down in the days before expiration in each of the last 6 months, even as the stock has been generally going up.)

    If you want to know who stands to benefit from Apple going down, see who the big option underwriters are...
    -JMP