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Jobs Rumor Debacle Besmirches Citizen Journalism
On Friday someone posted a false rumor that Steve Jobs had suffered a heart attack on CNN's unverified citizen journalism site, iReport. Apple's stock price went vertical, losing 9% before Apple stepped in and denied the rumor; the stock then recovered most of its loss. The SEC is investigating. PCWorld looks at the hit taken by citizen journalism as a result of this incident. "[The] increasingly blurred line between journalism and rumor is a serious concern for Al Tompkins, the broadcast/online group leader at The Poynter Institute — a specialized school for journalists of all media forms. 'How could you possibly allow just anybody to post just anything under your [CNN] label unless you have blazing billboards that say, "None of this has been verified, we've not looked at any of this, we have no idea if this is true"?' he asks."
The stock manipulation possibilities here are pretty big, as is the lawsuit potential.
How could you possibly allow just anybody to post just anything under your [CNN] label unless you have blazing billboards that say
Which part of "CNN's unverified citizen journalism site" was unclear?
Okay, so I have to see for myself...
The site currently is titled "Unedited. Unfiltered. News." but it really doesn't mention that it is "citizen journalism." It looks like a cross between Digg/Slashdot and CNN. SO I guess someone could be confused. But I bet a big "THIS IS NOT NEWS I JUST MADE IT UP OMG!!" would not have helped Apple's stock that day.
So this, like the previous wikipedia story basically hinge on the fact that people -- who should really know much better -- are believing stuff they read on the internet from dubious sources. (anything on Wikipedia is likely to be dubious at least to some degree)
You believe stuff you read on the internet, you get burned, quel surprise?
It ain't karma, it's just stupidity. It is admittedly disturbing -- and yet unsurprising considering recent world financial events -- that the stupidity in question in this case involves people who work in the stock market.
As one of a group who received a C&D from a game company over a CLEARLY labelled April Fool's Day joke about a decade back, on a hobby site where we REALLY weren't monitoring who our traffic was (thinking "Us and all of our NO readers"). Turns out the site had become a news dissemination portal for various game retailers, and when they viewed the joke page, they panicked before actually reading the WHOLE page and called the game company up to freak out at.
Chas - The one, the only.
THANK GOD!!!
It's up to the actual traders to verify unsubstantiated statements such as this before taking any action.
This is silly, in any case. If Apple is so dependent on the health of one person, they have bigger problems than the antics of a few journalists.
What are they going to do when Jobs finally does pop his clogs? Sooner or later, that is going to happen, and they need to think about that now rather than later.
I think the main takeaway from all this nonsense, aside from stupidity on Wall Street for believing anything and everything, is how frighteningly Apple's fortunes are tightly bound to Steve Jobs specifically.
Bill Gates slowly receded from the limelight at Microsoft, and allowed Ballmer and others to grow into their roles the market's mind. Jobs hasn't really done this yet at Apple. Apple has a few shining lights, but the top of the (Apple) tree is still very clearly The Steve.
{ - Generic Guy - }
We get the evidence of this over and over. Information of any kind; speculation; fear; panic; This is no way to base an economy.
We are off of the gold standard -- something that wouldn't fluctuate so badly as this. Not saying whether or not going off the gold standard was a bad idea, I just see that basing the US economy on this is just bad. Money is created and destroyed out of thin air. This is a voodoo magic market and economy. 700 billion won't fix this problem. What it will do is enable people to keep on doing what they did that allows this sort of thing to happen.
Apple's stock price went vertical, losing 9% before Apple stepped in and denied the rumor
Apple stock has been declining for several months now from around $180/share in May. There was nothing unusual in Friday's price movement when compared to the previous two trading days. On Oct 3rd AAPL traded between $98.20 and $106.40 per share, with a daily volume of 12.512M shares traded. On Oct 4th the range was between $95.30 and $102.33, with a volume of 12.739M shares, and Friday it traded between 95.43 and 101.23, and the volume was lighter - with only 11.4M shares traded. This is consistent with the downtrend for the previous 5 months. If you want to buy Apple stock at this point, feel free to become a long term investor.
Although it's understandable that Apple would strive to correct rumors about the health of their founder and CEO as soon as possible, these rumors were NOT the cause of the long term down-trend in Apple stock since May's highs, nor were they the cause of volatility that is completely in line with today's market conditions - especially when you compare the price movement in the stock with Friday's S&P 500 index, they line up almost perfectly with the general sell-off in the whole market that happened immediately after the vote on the financial relief package. People tend to buy the rumor and sell the news. This is nothing special.
I'm sure a handful of bloggers would love to think that they can move the entire stock market, or even a single highly traded stock, so easily, however we traders quickly learn that the market is smarter than all of us, and as the US government is about to find out, it also has more money than any of us, no matter how rich we are.
Seven puppies were harmed during the making of this post.