Don't Blame A Blog For Your Bad Investments When The Market's Being Manipulated
from the don't-shoot-the-messenger dept
The stock market was abuzz yesterday with the fallout from a post on Engadget — which turned out to be false — saying Apple was delaying the iPhone and the next version of the OS X operating system. In the minutes after the report, which was based on an faked email that was sent out to Apple employees, shares in the company tumbled 5% and volume spiked. After Apple denied the report, the stock went on to recover most of the drop, but plenty of investors are seeing red with Engadget, claiming the site’s shoddy reporting “cost” them thousands of dollars — even though judging the credibility of rumors is part and parcel of investing. It’s hard to see much fault in what Engadget posted, since the email in question did actually go out to Apple employees. It’s convenient for many people to bring out the generality that you can’t expect anything better from blogs, but they’ve quickly forgotten how a “legitimate” news source spread false rumors about Microsoft buying Yahoo a couple of weeks ago. But the bigger issue here is how it’s beginning to look like market manipulation is on the rise, and Engadget may have been an unknowing accomplice. In addition to the Yahoo rumors, which led its shares up 20%, rumors about Palm — rumors which haven’t proven true — have driven its shares up recently too. With M&A speculation at fever pitch, the market’s ripe for takeover rumors, while the pressure on media (both new and old) is more intense than ever to break stories. If the SEC or other authorities are going to look into the situation, it’s not the media outlets that need to be investigated, but rather the players spreading the disinformation.