Slashdot Mirror
Fake E-Mail Results in Angry Apple Shareholders
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.'"
Wheeee, fun time trading for somebody today.
Who else thinks they're running behind and wanted to see if they could push back the releases without scaring the sheep?
The Farewell Tour II
...is the fact that this hasn't happened more often.
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.
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?
Looks like they are flushing out folks who forward internal emails. Send to a few people and see if the fake news gets out. Binary search in action!
I think an 'owned' tag would be appropriate. =)
It must have been something you assimilated. . . .
because i heard the same story about delaying the iphone till october from a cingular rep two weeks ago. i wonder if this is the same leak...
Sorry, to be clear, "backdating" itself is fraud, if you mean backdating the grant, granting "in the money" options is perfectly legal, even if you based it on a the strike price of a previous date, which has also been called "backdating."
So if you grant options based on a strike price in the past, but you admit this is what you are doing, and call them "in the money options based on Dec 1 1900 strike price" instead of "options granted Dec 1 1900", you are fine. Pretending you granted the options in the past is fraud, and it's what Apple has admitted doing.
There's more in the New Yorker article.
temper->tamper (since you did it twice).
Nerd rage is the funniest rage.
They have admitted:
* Inventing on paper a fake Board of Directors Committee meeting that never took place (source)
* Using this fake meeting to backdate options at a total benefit to Jobs of $20 million (contrary to Jobs' false spin) (same source)
{snip}
Those facts are agreed by all parties. In the article that you linked to, an Apple spokesman is quoted as saying: "After an exhaustive independent investigation, the special committee (conducted by outside legal counsel) found no evidence that Steve Jobs, any member of the current board or current management was aware of that irregularity," he said. "The options grant was canceled and Steve Jobs realized no financial benefit from the grant." Sure the weight of that statement is diminished given that it's from an Apple spokesman, however, I didn't see anything in the article that contradicts him. So I'm puzzled as to why you used that article to support your assertion that Steve Jobs has "already admitted doing" this and that the "facts are agreed by all parties". Do you have another source to support your claims?
Perhaps, or maybe it's Apple's way of finding out who's been breaking their NDA.
Yeah, and I'd bet the Board of Directors would have liked a chance to vet that kind of move before blowing away $2 billion in shareholder value. I think this is just a prank gone horribly wrong. But for the grace of common sense go I.
Luke, help me take this mask off
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.
I don't believe you.
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.
Fact: Leopard is just the next version of a product that everyone already knows about. They've always hyped their OS because that's what software makers do, and how they generate buzz and interest. Plus, you can't keep an OS secret because you have to get people to generate software for the OS. That's why you have beta periods, developer networks, and the like to make sure that as many developers who want their products compatible with the next version are ready the day of the official release. Sun, Microsoft, IBM, all do it/did it. It would hurt Apple too much not to.
Fact: AppleTV had about the same lead time as versions of the iPod and other hardware announcements from Apple. No hardware maker makes their product available right this second after it's announced. They announce it at the best time possible to generate buzz, and then gear up to ship. It helps stir speculation and anticipation. Apple TV was no exception.
Fact: As Jobs said, he had to submit the iPhone to the FCC for approval. Jobs only announced it this early because at this point, he couldn't keep it under wraps any longer. It becomes public record once the phone is submitted to the FCC. Therefore, you announce it to keep the thunder away from everyone else.
"All great wisdom is contained in .signature files"
No, the rules do not change. And the rules are "there are no rules". They have zero liability here. In good faith, they thought the story was true.
/. debate the details of the story, several hedge funds trade out of Yahoo at a very nice profit.
Unless it is shown that a hedge fund or some other entity both made-up and profited from the story, it is what it is. A fake story and nothing more. Yes, the credibility of Engadget will be hurt but there isn't any legal implication whatsoever unless it was a true stock scam.
If you are actually dumb enough to trade on information like this, then you deserve what you get. "Bad" information is everywhere. That's why the smarter ones of us don't take everything we hear as the final word. As an example, don't you ever wonder how the "Microsoft is buying Yahoo" story got started? It's much much more subtle than this story and THAT is the proper way to do a stock scam. In that case, nobody can point to the originator of the story and it just seems plausible enough to actually be true. Meanwhile, as we idiots on
Of course, nobody can prove the story is a pump and dump so nothing happens and the world goes on. However, I don't think the Apple/Engadget deal is the same thing.
the mail was from sballmer@apple.com
While it is debatable as to whether Apple is too secretive for its own good, there is no denying that the company utilises rumour to build hype for its products through news blogs such appleinsider and thinksecret. The thing is about a rumour (that some people may forget) is that it can be both positive and negative for the subject in question. Sometimes rumours can backfire and this is just purely an instance of the Apple rumour mill NOT working in the company's favour.
As a former Apple employee, I can tell you without a doubt that they don't distribute this type of information in memos. The grunts like us are not privy to release dates for anything except pretty much our own assigned products. The only people who are at any point aware of big-picture information like this are the suits, and I doubt any of them would leak (especially considering you can count them on two hands).
Like the iPhone, Apple employees rely on the same sources regular joes do to find out about new releases. Nobody besides the iPhone team even knew what an iPhone looked like before it was shown at MacWorld.
Tom Clancy details a variation on this in one of his books: if you suspect you have a leak, you draw up a document which is a mix of truth and plausible lies which is interesting, will largely congeal with what the mole's handlers already know, and includes lurid phrasing at several locations. Then you leak N copies of that memo to your N possible leaks, and listen for what combinations of key phrases (or, not quite as easily, key facts) make it into unapproved channels. For example, you might embed twenty-five key phrases in a document about (hypothetical) insurgent activity in Iraq, and then if the New York Times quotes a briefing as saying that "Baghdad will be covered in rivers of blood" (given to 4 suspects) and that the military fears "total strategic defeat not just in Iraq but elsewhere" (given to 8 suspects) then the intersection of the two sets identifies the leak.
http://en.wikipedia.org/wiki/Canary_trap
Help poke pirates in the eyepatch, arr.
They wouldn't do this in the cash markets and they certainly wouldn't go long Apples shares as you're describing.
No, if this was manipulation (and I agree with you on the point that it probably was), then someone purchased put options, which increase in value as the underlying security, Apple shares in this case, decline.
They'd select the precise contracts to purchase based upon expiration dates and how far out of the money the put options were. Options give the holder immense leverage; I've controlled $3.4 million in shares using only about $20K in capital.
Short selling Apples shares wouldn't be viable as you're back in the cash market again - no leverage.
A message from our sponsor
Whatever happened to fact checking? The journalistic process? When did emails become newsworthy?! For god's sake people, wake up!