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Steve Jobs' Fake Heart Attack, Courtesy of CNN

by: Erick Schonfeld October 03, 2008 | about stocks: AAPL    

Erick Schonfeld

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Apple’s stock took a temporary 10-point hit this morning after a false report surfaced on CNN’s iReport that Steve Jobs had a heart attack. The report has been removed, but only after Silicon Alley Insider and others confirmed with Apple (AAPL) that Jobs did not have a heart attack. And the stock jumped right back up to its opening levels. SIA captured the original report:

Steve Jobs was rushed to the ER just a few hours ago after suffering a major heart attack. I have an insider who tells me that paramedics were called after Steve claimed to be suffering from severe chest pains and shortness of breath. My source has opted to remain anonymous, but he is quite reliable. I haven’t seen anything about 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. If anyone else has more information, please share it.

Was this just a short seller trying to make a quick buck, or someone trying to see how fast and far they could spread a false rumor? And what does it say about the value of citizen journalists?

Rather than fight the rise of citizen journalism, CNN decided to try to co-opt it by launching iReport. CNN’s iReport site lets anyone put up posts and videos about the news. Its tagline is “Unedited. Unfiltered. News.” Sometimes these reports get on CNN proper (presumably, after being vetted).

But as this incident shows, even the an unvetted report carries more weight than if it had appeared on Twitter or a random blog, because it is on a CNN site. And that may be purely because it gets distributed more broadly. It could also be because people tend to believe what they read on CNN-branded sites.

Let’s not let one bad apple ruin the whole experiment, though. Obviously, there are a lot of smart people out there who can contribute to general news gathering. There needs to be a better truth filter on iReport and other sites that allow the anonymous reporting of news. A better reputation system for contributors would help. They should be encouraged to use their real names. And maybe a bigger disclaimer needs to be placed up top saying: “Read At Your Own Risk.”

Apple can also learn a lesson from this. The stock would not have dropped so much if there wasn’t already a deep level of concern for Steve Jobs’ health and if the market knew who might take over in case of an emergency.

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This article has 33 comments:

  •  
    Oct 03 02:12 PM
    Ha! Since when did 'cnn' EVER have any credibility!!!????
    Reply
  •  
    Oct 03 02:13 PM
    The person said "i haven't seen anything about this anywhere else yet". Doesnt this ring a bell?
    Reply
  •  
    Oct 03 02:16 PM
    Just more BS and FUD spreading by people who are determined to make money by shorting this stock, by any means necessary. They are even more desperate to do so now that financials are off the table for their dirty tricks.
    Reply
  •  
    Oct 03 02:17 PM
    CNN IS done for me now. It has lost all credibility
    Reply
  •  
    Oct 03 02:20 PM
    Furthermore, CNN needs to work with law enforcement and assist them in any way possible to find the "citizen journalist" who posted this false story to their website. This person needs to see the inside of a prison to teach them that you don't play around with the financial market during a period of turmoil. CNN should also shut down such a useless part of their website.
    Reply
  •  
    Oct 03 02:21 PM
    The person that posted this false rumor was obviously a professional trader / short seller due to the way it was written. The SEC should hunt this person down and throw them in prison for a long long time. When are they going to start aggressively stopping this crap? They should ban all short selling! Period.
    Reply
  •  
    Oct 03 02:21 PM
    CNN, the guys who played the fake footage of Arabs celebrating after 9/11 that was really footage of Kuwaitis celebrating after the first Gulf War? CNN, the guys who spliced together footage from Nepal and claimed it was Chinese soldiers beating Tibetans? They're no longer credible? Nooooooooooooooooooooo...
    Reply
  •  
    Oct 03 02:33 PM
    We can only hope they catch the SOB and he ends up in jail as a warning to all who knowingly spread false rumors to influence a stock price up or down. If in a high-profile case like AAPL they throw this person in jail word will spread. The sale of millions of shares were triggered by this false rumor making this grand larceny any way you slice it. Shame on you CNN!
    Reply
  •  
    Oct 03 02:33 PM
    And AAPL is back to double digits.
    Reply
  •  
    Oct 03 02:37 PM
    As far as I'm concerned Erick, your final paragraph puts you on the same level as the jerk who wrote the false report. How pathetic!
    Reply
  •  
    Oct 03 02:38 PM
    i totally agree with all of you
    Reply
  •  
    Oct 03 02:38 PM
    they should just ban short seller for ever
    Reply
  •  
    Oct 03 02:43 PM
    Agree with User 145898.
    Reply
  •  
    Oct 03 02:47 PM
    Market is down when they fail to pass the bill... ok i understand why.. The market is still down when they pass the bill that is what i dont understand.
    Reply
  •  
    Oct 03 02:49 PM
    Short-selling was once a legitimate hedge, but now it's too easily abused. Any anonymous jerk can have all the power of CNN. The stock came back up, but not before lots of panicked people sold at a loss. This is truly a crime and I hope our government gets Wall Street under control. We need new rules for the Internet Age.
    Reply
  •  
    Oct 03 02:51 PM
    can any one explain to me why the market is going down when congress already passed the bill?
    Reply
  •  
    Oct 03 02:51 PM
    i thought we should have a 777 points up?
    Reply
  •  
    Oct 03 02:55 PM
    100 will be now a big psychological resistance level.
    Reply
  •  
    Oct 03 03:00 PM
    toni why ..? Shouldnt they be happy that congress passed the bill? Or they simply spreading rumors again to short stocks?
    Reply
  •  
    Oct 03 03:02 PM
    i think SEC should put more regulations on short sellers
    Reply
  •  
    Oct 03 03:15 PM
    "The stock would not have dropped so much if there wasn’t already a deep level of concern for Steve Jobs’ health and if the market knew who might take over in case of an emergency"

    Are you really that stupid, Erick?
    Reply
  •  
    Oct 03 03:36 PM
    msftdontneedyahoo - the market is not up because confidence is still lacking and people are taking profits but im only concerned with aapl...the ban on short selling financials needs to be lifted b/c the tech stocks are getting shorted...no way appl should be where it is or rimm...if u got the cash buy more
    Reply
  •  
    Oct 03 03:43 PM
    Agreed! If there is a trail to this person's computer, then it needs to be followed and they need to be prosecuted! There needs to be a firm stance against corruption right now!!
    Also agreed with deasys! While I would use the word "stupid", I would say that the rumors are done, gone, kaput, leave Jobs alone!
    Oh, OH! This just in!!!!
    STEVE JOB'S CAN NOT PRODUCE!! Reports and spy photos show Job's buying Exlax in an obvious attempt to relieve constipation that was not revealed to shareholders!
    Oh, in case you're too stupid, I made that up =P

    FULL DISCLOSURE: Getting reamed in the butt by AAPL stock.
    Reply
  •  
    Oct 03 03:48 PM
    Stupid-ass SEC doesn't do a goddamn thing against short-sellers manipulating the market. And to think 3 days after the bill passes, shorts are allowed back at the financials. Can you believe this?

    And Erick, you are a twit. Jobs' health appears fine.
    Reply
  •  
    Oct 03 05:36 PM
    Prosecuted because a bunch of gullible people watching CNN believed a no-source article about Jobs having a heart attack?

    Hah, the twitchy fingers deserve to have sold for a lost. What are we, a bunch of babies that bail at the first sight of a problem?

    Grow up and learn to play the market, not emotion.
    Reply
  •  
    Oct 03 06:44 PM
    Every Apple watcher KNOWS who takes over in an emergency. Apple has a COO who runs the day to day. This hits the stock because sellers fear other sellers and want to be the first one out.

    If something really does happen to SJ, I will cherish the bottom as a buying opportunity. Especially from these levels. All the bright talented people in its many businesses won't quit coming to work just because Steve isn't there. iPhones won't suddenly stop working. Macs won't suddenly get viruses. It's a company with amazing growth for its size, rabid fans for its products, ridiculous cash flow and nearly $25/share in the bank.

    It's a volatile stock and when it runs out of sellers, the snap back will be just as violent.

    Apple has a ridiculous amount of cash, the only possible long term use of which is to return it to shareholders. It has no forseeable reason to need the capital markets, ever.

    It's ALREADY trading at levels far lower than the loss of Jobs would justify.

    So, everyone, keep spreading the rumors and shorting the stock. Just do look at me when you need to cover.
    Reply
  •  
    Oct 03 06:44 PM
    Every Apple watcher KNOWS who takes over in an emergency. Apple has a COO who runs the day to day. This hits the stock because sellers fear other sellers and want to be the first one out.

    If something really does happen to SJ, I will cherish the bottom as a buying opportunity. Especially from these levels. All the bright talented people in its many businesses won't quit coming to work just because Steve isn't there. iPhones won't suddenly stop working. Macs won't suddenly get viruses. It's a company with amazing growth for its size, rabid fans for its products, ridiculous cash flow and nearly $25/share in the bank.

    It's a volatile stock and when it runs out of sellers, the snap back will be just as violent.

    Apple has a ridiculous amount of cash, the only possible long term use of which is to return it to shareholders. It has no forseeable reason to need the capital markets, ever.

    It's ALREADY trading at levels far lower than the loss of Jobs would justify.

    So, everyone, keep spreading the rumors and shorting the stock. Just do look at me when you need to cover.
    Reply
  •  
    Oct 03 06:48 PM
    btw, for those of you who hate shorts: They all have to cover some day. The farther down they drive it the more violent the recovery. If you have capital suitable for the market (that is not short term), get longer as it comes down.

    You will have your revenge.

    No shorting == no violent short covering rallies.

    Unlike the financials that were really hit, Apple doesn't need a cent of capital or cash (and won't ever.) The only effect a lower stock price has is that it improves recruiting by adding more upside to option grants.
    Reply
  •  
    Oct 03 07:52 PM
    Most of these comments are funny, but yet another steve...you hit it dead on the nose!
    Reply
  •  
    Oct 03 11:12 PM
    shorts will cover when the stock is at 0.1

    maybe

    why should it go to 0.1? why not and who will stop the sellers to get it there?

    HAS ANY SHORT OR " JOURNALIST" EVER GONE TO JAIL FOR SPREADING LIES?

    worship the free market, kill the last major US company that can innovate, vote republican to transfer all the wealth to bankers and short-sellers.

    Enjoy.




    Reply
  •  
    Oct 04 10:13 AM
    there is so much fear out there about Apple and the obvious climb up the ladder into a higher and higher share of the tech market, that some people will stop at nothing to try and impair that climb. and short traders...sigh. this sort of manipulation should be as illegal as insider trading...and treated the same way!
    Reply
  •  
    Oct 04 01:06 PM
    RE: "Apple can also learn a lesson from this. The stock would not have dropped so much if there wasn’t already a deep level of concern for Steve Jobs’ health and if the market knew who might take over in case of an emergency."

    Erick, having read a # of your posts the past few months, it is clear that you have a tendency to see only the negative regarding AAPL, the company as well as the stock. So anything negative you have to say regarding AAPL cannot be taken as anything of value. But in reference to the above quote from your post, it is now also clear that you are a complete moron.

    One lesson to be learned, clearly, is how stupid CNN is/was to sponsor a blog over which it has not control. Another lesson to learn in similiar vein, is that Seeking Alpha to remove from their bloggers morons like you that more often than not, post inaccurate information (i.e. 3G iPhone inventories @ a NYC Apple store), inaccurate analysis with a clear intent to taint the company & the stock. In my view you are not that much afar from johntw . . . or are you in-fact johntw? Wouldn't suprise me the least . . . because that's how you paint yourself on this blog.

    Reply
  •  
    Oct 04 06:56 PM
    Silicon Alley Insider published the report containing the false rumor and only later confirmed that the rumor was false. In other words Henry Blodget, a financial reporter, knowing that news relating to Mr. Job's health, can affect stock prices, without confirming a report (relying on an anonymous source no less) published that rumor in Silicon Alley Insider. Only later did Mr. Blodget mention that the rumor was false.
    Reply
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