“An 18-year-old posted the fake Internet report that Apple Inc. Chief Executive Officer Steve Jobs had suffered a heart attack, and investigators haven’t found evidence the teenager tried to profit from driving down the stock, two people with knowledge of the matter said,” David Scheer reports for Bloomberg.
“The U.S. Securities and Exchange Commission is examining the teen’s motives after the article on CNN’s iReport.com sent Apple shares down as much as 5.4 percent on Oct. 3, according to the people, who declined to be identified because the probe isn’t public. While the investigation is continuing, the agency hasn’t unearthed any trading records that show he benefited from the drop, one of them said,” Scheer reports.
“John Heine, an SEC spokesman in Washington, and Apple spokesman Steve Dowling declined to comment,” Scheer reports. “CNN spokeswoman Jennifer Martin said yesterday that the cable news channel wasn’t aware of the age or identity of the person behind the iReport post. CNN doesn’t plan to review its procedures for placing content on iReport, Martin said, declining to comment further.”
“The bogus report cut Apple’s market value by at least $4.8 billion in the first hour of Nasdaq Stock Market trading before a spokesman for the Cupertino, California-based maker of iPods and Macintosh computers said the report wasn’t true. The shares recovered a bit, closing down 3 percent,” Scheer reports.
More in the full article here.
[Thanks to MacDailyNews Reader “iWill” for the heads up.]
“there was no real harm done. Hopefully it taught people to look before they leap.”
How can you possibly know there was no real harm done?
And spare me the teaching everyone a lesson bullcrap. People who own stock are generally pretty smart and somewhat prudent, but if YOU owned shares and heard Steve was near death you would have been stupid to not dump the stock as quickly as possible, lest you suffer about a 35% drop in value in a matter of minutes.
If someone reported it on a Fark forum, yeah I’d call bullcrap, but it was on CNN so one would tend to think the story had at least been confirmed with one other source before posting.
@PC Apologist
Your comments are naive, so I will assume you’re a child, teenager at most.
Because you are ignorant I will give you a free lesson in stock market economics;
The drop in Apple market value only illustrates the immediate, demonstrable loss to investors and Apple.
The intangible losses are from buyers who were about to buy Apple stock but did not because of the false rumour.
Amount lost to Apple and investors? Unknown.
Some of those who sold on this rumour, or on programmed percentage/dollar-amount sell orders, probably did not re-buy.
Amount lost to Apple and investors? Unknown.
Jane Q. Public/potential switcher/business owner hears water-cooler talk about a “negative Apple event”. Delays or decides against Apple product purchase(s) – As damaging as a “whisper campaign”.
Amount lost to Apple and investors? Unknown.
Apple outsources manufacturing, packaging, and print-TV-web advertising
Amount lost to Apple’s tertiary beneficiaries? Unknown.
The negative “Mind Share Effect” of this one rumour alone, could last for years, and cost Apple and others many more billions.
See?
I could go on, but I don’t want to overburden your young mind.
“Investing in the stock market is GAMBLING.”
Wrong. Smart and prudent investing should not be considered gambling. Is there risk, yes. There’s risk in life, in stepping out the front door every day. But making wise investment decisions based on knowledge and research in good solid companies should yield favorable results whereas over long periods of time in gambling the house always has the edge and you always will lose.
If you don’t believe me, ask Warren Buffet.
I’m not buying it. AAPL took MUCH sharper hits in the weeks prior (see 9/29, 9/17, etc.). Panicky sellers caused the initial dip (a small one, since these are jerks selling on an unconfirmed internet rumor). Anyone who automatically SOLD a dipping AAPL after that was doing so against the advice of his financial advisor. Who in the heck sells a falling stock?
As for people not buying because of a (2-hour) rumor, SOMEBODY bought, as the stock price rebounded that day & grew like the dickens the following week. The chart shows a well-taken-advantage of opportunity more than any kind of damage.
Does it rise to the level of yelling “fire” in a crowded theatre? Maybe. Was anyone hurt in the stampede? Bumps and bruises only. But the $4M loss suggested by the article is in intraday value, and it had NO demonstrable lasting negative effect on the company’s reputation, value in general or stock price specifically.
Mountain out of a molehill.
Make that $4B