Apple Gets Bitten by the Rumor-Mill
The news appeared dire: a web report of serious problems connected to Apple's iPhone and the stock gets whacked. No, that's not a story from today. That news harkened back to June 3 when the website engadget.com reported erroneously of an internal Apple memo purporting to show that iPhone's launch would be delayed six months.
That day, as that "news" broke, my Blackberry went crazy, the phones starting ringing off the hook. "Get in the (anchor) chair," I was told. "News breaking!" What was it, I asked? "iPhone delays." Was it confirmed? "It's on the web." Great. Was it confirmed? Give me ten minutes, I said. You don't have ten minutes, I was told. Stock's reacting.
It took me five minutes to reach Apple spokesman Steve Dowling who asked for more time to see what was going on. I told him you have two minutes, as I put on my microphone and plugged in my earpiece.
He called 90 seconds later. I asked him if there were a Post-it note on his monitor telling him he was about to have a bad day. "No," he said. "That memo is a fake. iPhone is on time."
I went with the story 20 seconds later. The stock instantly recovered and even went positive. And the story was retracted. It took a few minutes, but the story -- our story -- was accurate.
Flash forward to today: reports -- rumors -- of an Apple production problem that could cut iPhone manufacturing in half, from 9 million units this quarter to 4.5 million from the website thestreet.com.
Apple's stock tanks. Hard. Three percent. Five percent. Seven percent. Thestreet.com's reporter Scott Moritz writes: "The chatter that sent the stock down was that Apple was reducing its production of iPhones from '9 million units to 4.5 million units' according to a note from the stock trading desk at Miller Tabak & Co.
"The trading note, issued in an attempt to explain why Apple shares were down in heavy volume despite a lack of apparent news, cites talk on Wall Street and also points to speculation that the cuts may be coming in iPod production."
Sounds intense. If it were true.
The note reportedly came from trader Peter Boockvar. I called him this evening and he not only distanced himself from the note, but says there never was one. No alert. No broad warning to clients or traders of any kind. Turns out one trader was communicating with one
client via email and when asked whether he had heard of the rumors, Boockvar said yes and from then on, the "news" was attributed to his firm.
"We weren't issuing any kind of report," Boockvar tells me. "We don't have an Apple analyst. We don't even have a tech analyst!"
But the damage was done. I got a mention of this on at the end of Closing Bell near 5 p.m. EDT today. Trouble was, the trading day was already done, and Apple investors saw $8 billion in market cap wiped away because of what seems like overly aggressive reporting that turned out not to be true.
I'm all for aggressive. I'm all for peeling back the PR white-wash that can dominate tech news from time to time. I'm all for working fast and being tough. I'm also all for being fair; and mostly, I'm all for being right. I've made my fair share of mistakes. You can't do this job properly without making mistakes. Even the best basketball and water polo and hockey players commit fouls and penalties when they play the game.
But today's coverage of Apple just seemed sloppy. And sadly, the company and its shareholders paid the price. I talked with another trader at Miller Tabak who told me he was just stunned at what happened today. How simple conversation between one individual and
another could instantly be blown so far out of proportion. And for no apparent reason. He was shocked.
Today's Apple action is a wrenching reminder that investors can no longer be content simply considering the source. Investors have to take matters into their own hands and do some research of their own.
Especially with journalistic lines so blurred nowadays between TV, internet, newspapers, and blog; all of whom proclaiming their legitimacy, accuracy and relevance. I'm not proclaiming my perfection; or even CNBC's. I've copped to mistakes I've made. And that's the lesson here: we all make mistakes.
It's just that this one could've easily been avoided with a little more attention paid to "journalism," and a little less paid to the "noise." Type first and ask questions later doesn't work in print, on the air, or even online.
Apple should be an interesting play on Wednesday. It's almost like the company's going to be on sale: 7% off!