False CNN Rumour Bites Into Apple Stock

Dennis Faas's picture

Apple shares briefly dropped in value by more than 5% in the wake of a false rumour claiming the company's chief had suffered a heart attack. The bogus report has sparked debate about the dangers of so-called 'citizen journalism'.

The report claimed Steve Jobs had suffered a heart attack and been taken to hospital. It gained some credibility by appearing on CNN's website, though it appeared in the iReport section dedicated to 'citizen journalism'. Anyone who wants can post a report and CNN disclaims any responsibility for the accuracy of stories posted there.

Apple only took 12 minutes to issue a full denial of the story after it had been posted. However, during this time nervous investors began selling stock so much that the market price dropped from $105.27 to $95.41 before recovering once Apple's statement circulated. To put that into context, for those 12 minutes the bogus article wiped more than eight billion dollars off Apple's market value. (Source: bloomberg.com)

CNN removed the story after complaints from other users of the site. The hunt is now on for 'johntw', the user who posted the story. There's already speculation the Securities and Exchange Commission, which governs financial markets, may investigate the post to see if it was a mere prank or an intentional attempt to cause a temporary dip in the price.

It's certainly conceivable somebody could have posted such a story, bought the stock as it fell, then sold it again once the rumours were cleared up. If they timed it right at both ends, they could have made a 10% profit. That would be a serious crime and a previous similar case saw a fraudster jailed for nearly four years. (Source: wired.com)

The false Apple report was particularly convincing thanks to longstanding rumours about Jobs' health, which he continues to deny. At one point news service Bloomberg even published his obituary, though this was merely a technical error; a staff member was updating an obituary prepared in advance and held on file to save time when Jobs does eventually die, but mistakenly put it live online.


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