By Erika Morphy MacNewsWorld Part of the ECT News Network
10/03/08 3:54 PM PT
Apple's shares plummeted following a citizen journalist's report that CEO Steve Jobs suffered a heart attack. The company did damage control with a fast denial, but not before its shares plunged 10 percent. The SEC reportedly is now looking into what may have been an effort to capitalize on stock manipulation.
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A report posted on the
citizen journalism section of CNN's Web site Friday morning claimed that Apple (Nasdaq: AAPL) CEO Steve Jobs had been rushed to the hospital with a heart attack. The reporter cited an anonymous but "quite reliable" source who supposedly said paramedics were summoned after Jobs complained of severe pain and shortness of breath.
"I haven't seen this anywhere else yet, and as of right now I have no further information, so I thought this would be a good place to start," the citizen journalist wrote.
A 10 Percent Fall
Depending on what the poster's intentions were, it certainly was a good place to begin. Shortly after the post appeared, well-trafficked blogs and other news sites picked up the report. By the time Apple flatly denied it, the company' stock had tumbled some 10 percent.
The theory is that the report was posted so the author could benefit from the stock fluctuation. Apple was not amused, nor was CNN, for that matter. The Securities and Exchange Commission has apparently taken exception to the report as well. The government agency is investigating the incident, according to an account in Bloomberg news citing CNN as the source of that information. Neither the SEC nor CNN returned a request for comment to the E-Commerce Times in time for publication.
Jobs' health has become a source of ghoulish and fiduciary concern over the last several months on the part of observers and investors alike -- a situation that played perfectly into the poster's hands, if such a fraud were indeed the intent.
"Given all the rumors, it was easy to believe," Peter Cohan, principal of
Peter S. Cohan & Associates, told MacNewsWorld.
Risky Business
If SEC has indeed undertaken an investigation, it's not surprising, Cohan said. "Sure, it would seem that this is not the best use of the SEC's resources at this particular moment, but this kind of manipulation is exactly the kind of thing it wants to stop."
The agency's task will become that much harder as more citizen journalism endeavors like CNN's iReport emerge on the Web. iReport, which should be considered the gold standard, in fact has few safeguards against such misuse.
CNN has been
running this risk for some time, observed Dan Gillmor, director of the Knight Center for Digital Media Entrepreneurship at Arizona State University's Walter Cronkite School of Journalism and Mass Communication.
"The labeling of the site has never been, in my view, sufficiently careful to shout at readers that they should not take for granted that anything they see is necessarily true -- or that readers who might make any kind of personal or financial decision based on what they see on the site are idiots," he wrote.
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