Geeks Post on a Blog, Rich Men Lose $4 Billion
For anyone still doubting the power of blogs and bloggers to effect change in the real world, take a look … Continued
For anyone still doubting the power of blogs and bloggers to effect change in the real world, take a look at this: Yesterday morning, Engadget.com reported on what it believed to be a legitimate internal e-mail from Apple that stated that the hotly anticipated iPhone would miss its slated June release and be delayed until October. Additionally, the e-mail said, the next version of Apple’s OS X operating system would also be delayed, until next January.
Now, the interesting part: Almost instantly (seven minutes, to be exact) after the Engadget announcement hit, at around noon EST, Apple’s stock price tumbled by over $4.50 in a massive sell-off (the drop took only an additional six minutes). That amount might not seem like much for a stock valued at around $107 at the start of trading today, but applied to the full volume of shares on the market, the drop represents a market-capitalization loss of just over $4 billion. In the blink of an eye, a lot of people (Steve Jobs more so than anyone) lost a lot of money. All from a blog post.
As the Engadget post has now been updated to say, the e-mail was quickly denounced by Apple as a fake—even though it was supposedly confirmed that it came from Apple’s own e-mail system. To say this is suspicious is an understatement, and the Apple camp is surely scurrying to figure out how this e-mail was sent with what amounts to their e-letterhead.
After the e-mail was outed as a fake, people rushed to take advantage of the dip to buy up more shares, propelling the price back up to $109.44 at the close of business today (a 2 percent gain on the day). Still, many are wondering what will happen next. Most on the Web are assuming that Engadget has little liability in the situation, but if anyone over at Weblogs, Inc. (Engadget’s parent company, which is owned by AOL) shorted a ton of Apple stock during those 15 minutes of action, there could be some explaining to do. Apple’s liability is less clear—if the e-mail did in fact come from its servers, it could also be investigated for some form of securities fraud.
Any securities-law whizzes want to jump in here and speculate on what might happen? —John Mahoney