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Feel The Power Of The Blog!

written by John Chow on May 16, 2007

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Ever wonder how much power one blog can swing? Well, Apple got a taste of that today as they saw their market value dropped by a whoppin’ $4 billion because of one post from Engadget.

Engadget made a post saying that the iPhone and Leopard operating system launches would be seriously delayed. They based the story on an internal Apple email that was forwarded to them.

This one doesn’t bode well for Mac fans and the iPhone-hopeful: we have it on authority that as of today, the iPhone launch is being pushed back from June to… October (!), and Leopard is again seeing a delay, this time being pushed all the way back to January. Of 2008. The latest WWDC Leopard beta will still be handed out, but it looks like Apple-quality takes time, and we’re sure Jobs would remind everyone that it’s not always about “writing a check”, but just how much time are these two products really going to take?

Within minutes of the post going live, Apple stock dropped from $107.89 to $103.42, wiping over $4 billion off the company’s net worth in just six minutes!

It turns out the email was a hoax. In an update, Engadget said that the email was in fact sent from Apple’s internal email system, but that it was not accurate. Apple quickly notified Engadget of the error, saying “This communication is fake and did not come from Apple. Apple is on track to ship iPhone in late June and Mac OS X Leopard in October.”

After Engadget made the update, Apple stock went back up but it still ended the day $1.25 billion less than when it started. All this happened in 22 minutes. Who would have imagine a blog can swing that kind of power over the market?

Source: TechCrunch

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{ 65 comments }

dot info domain May 16, 2007 at 9:52 pm

that’s shocking

Dot info domain May 17, 2007 at 12:03 am

from 107 somthing to 103 something doesn’t sound much

it sure adds up with the vast shares of apple

just as john’s post about nickel and dime

Dot info domain May 17, 2007 at 12:30 am

when will i have such an influential blog?

UberDan May 17, 2007 at 5:30 am

That is shocking. I wondered if any Apple employees retired yesterday on the back of that sharp 20 minute price dip :shock:

Law of Attraction May 18, 2007 at 12:29 am

not really..news seems to have such effect

dot info domain May 16, 2007 at 9:54 pm

Tip of the day:
if engadget goes public, buy its shares!

John Chow May 16, 2007 at 11:26 pm

Engadget is owned by AOL. They are already public.

Dot info domain May 17, 2007 at 12:01 am

Thanks for letting me know

So do you own any engadget shares, John?

Law of Attraction May 18, 2007 at 12:30 am

AOL shares are not a good deal…atleast rite now…

Rhys May 17, 2007 at 3:28 am

In that case, don’t by their shares on principle!

Monetize Your Blog May 16, 2007 at 10:03 pm

wow, unbelieveable!

i wonder if apple will sure engadget for the incident

Pallab May 16, 2007 at 10:52 pm

Engadget says that the email originated from Apple’s servers.
If that is correct then I dont think Apple will sue.

dot info domain May 16, 2007 at 11:14 pm

maybe, John’s post is just another hoax…

have you thought of that?

UberDan May 17, 2007 at 5:35 am

No hoax you can check out the share price for yesterday, APPLE ticker NASDAQ:AAPL there was a huge $4 drop :shock:

Hari May 16, 2007 at 10:20 pm

Thats one great loss for APPLE

Deaf Musician May 17, 2007 at 4:49 pm

Eh, that’ll catch up in couple days.

Cheap Custom Content May 16, 2007 at 10:35 pm

$1.25 billion in 22 minutes — I didn’t know engadget had THAT much power. That’s a pretty big loss for Apple indeed. However, I’m sure their PR is going to come up with something to earn it (or more) back.

dot info domain May 16, 2007 at 11:10 pm

they’d better, that’s a lot of money!!!!!!!!

Shawn Knight May 16, 2007 at 10:47 pm

Just goes to show you the power of the internet. I never would have guessed such a huge drop would happen so quickly… but these days, nothing really surprises me…

Cheap Custom Content May 16, 2007 at 11:37 pm

I know, my sentiments exactly; had I read about this from another source I don’t think I would’ve believed it.

Law of Attraction May 18, 2007 at 12:31 am

ya especially engadget is trusted by people…Apple should sue AOL..

dot info domain May 16, 2007 at 10:51 pm

same here.

but 4 billion, it sounds too much

High Return Investing with Dax May 17, 2007 at 12:25 am

I’ll take any amount with a “billion” behind it. :smile:

Monetize Your Blog May 17, 2007 at 12:34 am

who wouldn’t?

Law of Attraction May 18, 2007 at 12:32 am

i’d take it also…haha..

Linux operating system May 16, 2007 at 10:58 pm

It says now false alarm, would not Apple put that blogger in a Court for this?
Maybe Apple felt the power of blog, but now I think Blogger will feel the power of Apples lawyers.
:)

Cheap Custom Content May 16, 2007 at 11:45 pm

It could’ve been a cover-up; I mean, who in their right mind would admit they lost that amount of money. Apple isn’t paying their Public Relations big bucks for nothing. I’m sure they’re going to get out of this mess soon.

High Return Investing with Dax May 17, 2007 at 12:23 am

Fact is Apple did not lose any money on this. The shares will reach a price that the market dictates is fair value. If a person was sharp enough to have seen the blurb about the delay than they most likely also saw that it was a hoax (eventually probably after selling at a loss).

If anything Apple got more free press about the iPhone and reaffirmation of the release date.

Law of Attraction May 18, 2007 at 12:34 am

ya share prices will recover by next week…but it would stilll be fun to sue

louiss May 16, 2007 at 11:17 pm

Wow..blogs really can influence the market, I love blog now!

Kevin May 16, 2007 at 11:20 pm

thats crazy. it highlights how influential engadget and gizmodo etc are.

i dont think apple will sue engadget though

SeanS May 16, 2007 at 11:21 pm

Wow.. who sent the fake e-mail then??

Linux operating system May 16, 2007 at 11:36 pm

Microsoft??? :)

UberDan May 17, 2007 at 5:37 am

LMAO maybe a bit of insider trading :mrgreen:

Law of Attraction May 18, 2007 at 12:44 am

i agree…nice way to make some money..short stock and then sell…..and then buy again and sell high(when market recovers)…

like before 9/11 airline stocks were shorted like crazyy..wonder who knew abt it?

alamster May 16, 2007 at 11:23 pm

wow…wow…wow

for next campaign I think more review on product will use blog too :grin:

internet marketing blog May 16, 2007 at 11:29 pm

I read the post on TC and must say, wow. 4 Bill market cap loss in one day OVER A BLOG. That is amazing. Wonder how much traffic engadget is going to get over thiss.

Taste of life May 16, 2007 at 11:36 pm

Impresive drop down…

Money May 16, 2007 at 11:37 pm

Personally, I think it’s slightly pathetic. What does it say that the public makes its decisions on what to buy and sell on the stock market based on information on Engadget.com??? I think it’s a bad sign that a post like this can have such a dramatic effect… perhaps we all deserve to have gullible written across our heads. However.. it is somewhat evil to think that I could spoof an e-mail to Engadget… and cause a stock to jump (or fall) $4!! You could actually make a lot of money like that…

Bottom line, Engadget needs to be more responsible of what they post on their site.

Make money by reviewing my posts.

High Return Investing with Dax May 17, 2007 at 12:21 am

I have to wonder if someone shorting Apple shares at Engadget was just trying to get a little extra money to build a patio in the backyard…. or buy a yacht.

Law of Attraction May 18, 2007 at 12:47 am

i agree with the second point engadget needs to be more responsible…but in general we make our decisions based on our perception, so not following engadget or any other source might also turn the other way and you can miss an oppurtunity to make money..

green May 16, 2007 at 11:45 pm

What a great loss in a very short time.

Law of Attraction May 18, 2007 at 12:49 am

and a recovery as well in a short time… billions of dollars in market cap. is the last thing on the head of these companies…as these companies have market cap of more than 100 billion…so a couple of billion up and down is normal

Cheap Custom Content May 16, 2007 at 11:48 pm

They lost that much in a few minutes, but I’m pretty sure they can make the same (if not more) money in no time at all.

High Return Investing with Dax May 17, 2007 at 12:18 am
High Return Investing with Dax May 17, 2007 at 12:27 am

This entry made me wonder… “What phone does John Chow sport?”

Dot info domain May 17, 2007 at 12:31 am

an expensive one for sure

Simonne May 17, 2007 at 12:36 am

I’m very glad to see blogs have such power. In this moment I am so upset with a bunch of sites making me waste my time, that I’d like to see some consequences following the post I’ve just written: http://www.alltipsandtricks.com/blog/2007/05/17/paypal-only-payment-option/

I don’t have Endgadget’s audience, but there are some 10000 people who read my blog every month, so at least they would be aware of such things.

Judith in Umbria May 17, 2007 at 1:09 am

This points out the danger of unprofessional newsgathering in which a reporter (blogger) feels no responsibility to check facts. Someone from WSJ would know that every attempt would need to be made to contact the companies and if they didn’t respond, that too would be reported.

This story is less about power than it is about irresponsible reporting. If you feel that you have a powerful voice, then be sure you are using it wisely, because the person who had to sell his stock in that interim to meet a bill or make a down payment just took a huge hit because you opened your mouth while it was detached from your ethic.

Founders Cafe May 17, 2007 at 1:10 am

It wouldn’t shock me a bit if these 2 scenarios took place:

1.) Someone shorted Apple stock by either short selling shares, or bought a bunch of Put Options, or sold a bunch of Call Option spreads before finding a way to send out that hoax email.

2.) This same someone closed out of those positions after the initial dive, and went long (bought) Apple shares, or Call Options, or sold Put option spreads.

You’ll be amazed what goes on in the financial arena nowadays.

Judith in Umbria May 17, 2007 at 1:31 am

We know that happens, but we know it’s fraud, too. It isn’t impossible to find out who generated the email to Engadget. If it is investigated and the sender is found to have been trading the stocks, well, Martha Stewart served time for less and supposedly she was made an example. Was no one watching?

The real harm wasn’t done to Apple, it was done to innocent others who were trading normally in the stock with the expectation that they weren’t being scammed.

Law of Attraction May 18, 2007 at 12:53 am

what happened to Martha was just sad…..and anyone in her shoes would have done that…she was blown out of proportion…if ur friend works for apple and he tells u tomorrow to sell apple and the next day apple stock falls…then u r guilty of the crime which Martha went to jail for. She is soo high profile that she got stuck.

But in his case it is fraud as the person knows that by spreadin wrong information they can make money, there is a malicious intent….

the point made by founders cafe is exactly what happened to airline stocks brfore 9/11

andolini May 17, 2007 at 1:23 am

Hi John,

Forgive this technologically challenged blogger for posting this message here.

I am using the new blogger template and I am having trouble making my 250×250 adsense ads appear on top of my posts. What i want to do is have adsense ads merged with my posts at the top right side portion of every post. Whenever I paste the google codes on top of my posts, nothing appears.

What I am doing now is using bidvertiser but I think, Adsense has higher revenue generating ads.

Thanks

andolini May 17, 2007 at 1:33 am

If the news is eventually proven to be untrue, or if the magnitude of the price decline is way below its actual value, some people are bound to make a killing by buying shares of stocks when the prices are way low than its actual value.

Rhys May 17, 2007 at 3:31 am

Is scary that, losing astronomical amounts of money in a day. Still, I’m sure apple will recover further, these scares happen all the time (remember with Google a few years back when they announced that they were cooperating with the Chinese Censorship Laws? I think something like $40 billion was lost in a day).

Rich Minx May 17, 2007 at 5:52 am

What interests me is how quick Apple shareholders are to sell up based on one blog post, with no further consideration. How hysterical is that?

Law of Attraction May 18, 2007 at 12:55 am

thats why we say its a fools market..its run by fear and greed…lets not get in the theory :lol:

Dy (www.dyphan.com) May 17, 2007 at 6:18 am

This is a complete showcase of why I don’t listen to shows like CNBC. The stock market isn’t about daily swings and things… it’s about holding longer term investments that are solid.

Law of Attraction May 18, 2007 at 12:58 am

i agree..buy and hold is the way to make money…..but there is a rush in making $400/day which comes from day trading….and i remember my day trading days it was soo much fun….even after 4 months i ended up losing money…

Make Money Online At Earning Blog May 17, 2007 at 6:44 am

wooooowww

that’s amazing

Stephen Welton May 17, 2007 at 8:06 am

It goes to show how much the market can be effected by the perception and interpretation of information.

“May The Blog Be With You” – me

I’m all in on the next bounce too.

Deaf Musician May 17, 2007 at 4:48 pm

Yea, that was totally bad ass. I wanna get my link on Engadget.

Johnny May 17, 2007 at 6:09 pm

Blog power is destructive… all it took was that 6 mins to lose 4 bil. :neutral:

Wahlau.NET May 22, 2007 at 11:15 am

ohh..this is cool…maybe you could try writing some bad stuff at engadget

confessing7girl May 23, 2007 at 3:33 pm

wowwwww Apple must be soo happy!! one single innocent post can actually make a company like Apple lose millions!!!!!! i just hope someday my blog can be as powerful…… ill keep dreaming!!