Engadget blunder sends Apple stock tumbling

False email catches out news site, Apple suffers

One of my favorite tech blogs fell flat on its face Wednesday. Engadget posted a story claiming the expected June launch of the iPhone would be delayed until October and the Leopard October debut would be postponed until January. Engadget's credited its source as coming from an internal Apple e-mail.

The e-mail tip turned out to be false. But before anyone figured this out Apple's stock tumbled 3 percent losing US$4 billion in value by the end of the trading day.

Apple reacted quickly and issued a statement saying that the iPhone and Leopard are both still on track -- the iPhone will ship at the end of June, and Leopard will ship in October. Engadget quickly posted a correction.

Here is Engadget's original blog post accompanied by Engadget co-founder Ryan Block correction.

Stock Manipulation Via Fake News --- Nothing New

I agree with others that speculate Engadget was played by a trader who knew that this story would have a negative impact on Apple stock. My guess is they used this rumor to short Apple stock and mint a fortune.

Blog bashers will point to Engadget's flub for years to come. But it's important to remember "traditional" media has fallen for similar chicanery before to.

In 2000 Emulex, a networking firm, saw its stock take a nosedive from a morning high of $113.06 to a low of US$43 by lunch time. What prompted the stock to drop was headlines that appeared on major wire service proclaiming: "Emulex Announces Revised Earnings; SEC Launches Investigation Into Accounting Practices. Paul Folino Steps Down As CEO."

The story was fake. It was planted by a then 23-year-old Mark Jakob, a former employee of a wire service called Internet Wire. The story was planted by Jakob on the wire and it was picked up by major news outlets as real. The FBI investigated and arrested Jakob. Published reports say Jakob made US$250,000 from his scheme, money he later had to return.

If the Apple/Engadget incident is a case of stock manipulation than this is a coming-of-age moment for Wall Street miscreants who target blogs. The success found with dropping Apple stock will only fuel the cottage industry of manipulating stock prices through e-mail, message boards, and blogs. With Engadget the scammer(s) landed a big fish. You better believe they are thinking about a new stock/blog target right now.

Penny stock spam scam

People behind the spam stock scam typically buy a bunch of penny stock in a company. Next, they send out millions of spam messages touting that stock--typically via zombie computers (owned by home PC users). When enough people buy the stock--and believe it or not, some people actually do--the spammers sell their holdings and make a modest return.

How many people actually fall victim to these stock tips? A spammer can make a 5 to 6 percent return in just a few days from stock hyped via spam, according to a recent study conducted by researchers at Oxford University and Purdue University. The researchers also found that spam recipients who invest in those same stocks lose about 7 percent of their investment.

In March the U.S. Securities and Exchange Commission (SEC) suspended trading for 35 companies that allegedly benefited from spam e-mail campaigns to hype their stocks.

Join the PC World newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Tom Spring

PC World
Show Comments

Cool Tech

Crucial Ballistix Elite 32GB Kit (4 x 8GB) DDR4-3000 UDIMM

Learn more >

Gadgets & Things

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Family Friendly

Lexar® JumpDrive® S57 USB 3.0 flash drive 

Learn more >

Stocking Stuffer

Plox Star Wars Death Star Levitating Bluetooth Speaker

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest News Articles


GGG Evaluation Team

Kathy Cassidy


First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni


For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell


The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi


The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott


My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?